TaxTMI 
TaxTMI 
2017 (3) TMI 1721
X X X X Extracts X X X X
X X X X Extracts X X X X
.... used to be supplied by Assessee to labourers, who are paid wages for such assembling and assembled locks are received and process of polishing, nickeling, branding etc is undergone at the premises of Assessee. The entire exercise cumulatively results in bringing out a new item namely, lock of a particular brand and, therefore, amounts to manufacture as defined in Section 2 (f) of Act, 1944; ii) Whether definition of ''manufacturer' in Section 2 (f) of Act, 1944 being inclusive would cover various activities referred to in question 1 and in totality will answer the definition of ''manufacturer'; iii) Whether findings recorded by Commissioner of Central Excise regarding functioning of Assessee in making "Harrison" brand locks, having not been reversed, still Tribunal could hold Assessee, not a manufacturer of "Harrison" brand locks, such a judgment of reversal without reversing findings of Commissioner is sustainable in law; iv) Whether judgment of CCE, Baroda Vs. M.M. Khambhatwala, 1996 (84) ELT 161 S.C. is applicable in the case in hand and has rightly been applied by Tribunal, though facts in the aforesaid judgment were somewhat ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtment and locks from small dealers at Aligarh, whereupon his Firm put on their labels/ stickers by hand. Samples of such stickers/stampings/ labels are part of Annexure- "C" to Panchnama dated 29.09.2000. The locks received from M/s Key Locks and those stamped by Assessee are similar in all manners. 8. Assessee did not maintain any stock register in respect of locks purchased and sold. Copies of balance-sheet as well as Tax return and purchase statement for the year 1990 to 2000 were made part of Panchnama as Annexure- "A". Sri Monga could not produce any correspondence/ invoice/ duty paying documents in respect of locks found at his premises. 9. Subsequently, Sri Anil Monga's statement was recorded by adjudicatory authority on 05.01.2001 wherein he said that list of dealers other than Key Locks from whom Assessee purchased locks would be provided at a later date. He also said that order for purchase of locks are placed verbally to Manufacturers/Suppliers. There is no written agreement with these Suppliers for supply price, specifications etc. All payments are made in cash except to M/s Key Locks to whom payments are made through cheques. Process of stamping, engraving e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oshaki Lal show that against verbal orders, they have manufactured locks after receiving raw material or financial assistance from Assessee. Sample of locks or specifications were supplied by Assessee and locks manufactured by those persons were supplied in plain condition without any brand/trade mark/ name and without packing. From statement of Vishnu Bhagwan, Ram Pal and Panna Lal, Revenue Authorities also noticed that name of minor children and person(s) who have never been concerned with the work relating to manufacture and supply of locks have been given in the list of manufacturers/suppliers submitted by Assessee. With regard to process of manufacturer of locks adjudicating authority has observed as under: "(a) Locks consist of main body, lever mechanism; shackle and keys. Locks are assembled together by riverting or screwing process. The body can be either sheet metal of steel or brass and levers are made of stampings of steel/brass. The keys can be made by stamping brass sheet or forging of brass or steel. Shackle is made from round steel rod from 3 mm to 12 mm diameter. (b) Shackles are found to be electroplated. Electroplating requires D.C. power which i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arts are not made available, finance to purchase those parts are provided by Assessee. The locks, therefore, were assembled at the behest of Assessee, who was supplier of parts directly or by providing funds. The Suppliers or Artisans assembling the parts used to be paid labour charge of Rs. 3/- per lock, i.e., they were virtually doing piece rate work. Various functions for the lock and its parts need power, for example, electroplating, riveting, manufacture of screws etc. Nothing has been placed before us to show that these findings recorded by Revenue Authorities are perverse or not based on material on record. Hence, we have to consider the questions in the light of aforesaid facts and findings as to whether it is a mere case of electroplating, polishing and fixation of MRP labels or in fact entire process of manufacturing is under the control of Assessee and from the stage of supplying the parts, Assessee is instrumental. The only difference is that assembling of parts is allowed to take place outside the premises of Assessee. 17. The word 'manufacture' has not been defined under Act, 1944 and, therefore, the meaning of word as generally acceptable and known in comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing, mere branding, mere minor treatment of rendering the goods marketable would not amount to 'manufacture' and in order to constitute 'manufacture' there must be some change to show that a new commodity has come into existence. 22. In Collector of Central Excise, Jaipur Vs. Rajasthan State Chemical Works, Deedwana, Rajasthan (1991) 4 SCC 473, Court observed that 'manufacture' includes or involves series of processes. Process in manufacture or in relation to manufacture implies not only the production but various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to, manufactured product emerges. Each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods, that, but for that process, manufacture of processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. In the context of process undergoing by M/s Rajasthan State Chemical Works, Court observed that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....carried on with the aid of power, the process in or in relation to the manufacture must be deemed to be one carried on with the aid of power. In this view of the matter, we are unable to accept the contention that since the pumping of the brine into the salt pans or the lifting of coke and lime stone with the aid of power does not bring about any change in the raw material, the case is not taken out of the Notification. The exemption under the Notification is not available in these cases. Accordingly, we allow these appeals. In the facts and circumstances of the case, we make no order as to costs." 23. In Standard Fireworks Industries, Sivakasi and another Vs. Collector of Central Excise, Madurai (1987) 1 SCC 600, Court held that manufacture of fireworks requires cutting of steel wires and the treatment of papers and, therefore, it is a process of manufacture of goods in question. 24. In Servo-Med Industries Pvt. Ltd. Vs. Commissioner of Central Excise 2015 (319) ELT 578 (SC), Court has culled out certain principles as to when it can be said that there is a manufacture of goods and after going through various earlier authorities on the subject, held as under: "(1) Wh....