TaxTMI 
TaxTMI 
2009 (4) TMI 169
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....and Village Industries Commission, are engaged in the manufacture of Polyvastra in accordance with the Polyvastra Certification Rules, issued pursuant to Regulation 24 of the KVIC Regulations, 1958 and against a valid certificate. They have a factory with production facility upto the stage of Roving. Polyester and Cotton fibres in the ratio of 67:33 are mixed and subjected to certain processes such as Carding, Drawing, Combing and Roving with the aid of power in order to bring into existence Roving ends in Bobbins. The Roving ends are sent to various production centres and then onwards, sent to various individual spinners provided with Amber Charkas by the appellants for the purpose of spinning Polyester Cotton Blended Yarn in hanks. Charge....
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....entral Excise Act, 1944. The notification provides as under :- TABLE Description Period (1) (2) … … … … … … Yarn of polyester staple fibre containing cotton (not containing any other textile material) and in which the proportion of polyester staple fibre is less than 70 per cent, by weight of the total fibre content, manufactured or purchased by a factory owned by the Khadi and Village Industries Commission or any organization approved by the Khadi and Village Industries Commission: Provided that, the manufacturer produces a certificate from an officer authorized in this behalf by the Khadi and Village Industries Commission, that the yarn have been used only in the manufactur....
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....ion of the sangh and using the Material and Machinery i.e. Roving Ends and Charkas both supplied by the Sangh; 2. The ownership of the goods continues to be vested with the Sangh which is in-charge of the whole affairs of the production activity; 3. Unlike a factory, the spinners in the instant case may not remain together under a common roof but they are effectively employed for the wages linked to the production. Poly Vastra Certification Rules clearly states that the Surplus if any, shall be utilized for the welfare of the artisans. If further states that no other Sangh would transgress the area of operation allotted to it by the Central Poly Vastra Committee. In effect, the entire notified area is deemed to be the place of manufac....
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.... light of the apex court decision in Collector of Central Excise, Baroda v. M.M. Khambhatwala [1996 (84) E.L.T. 161 (S.C.)], wherein household ladies producing goods in their own premises out of raw materials supplied by respondents who paid wages on piece basis were the manufacturers of the goods namely aggarbathi, dhoop etc., and not the supplier of the raw material, in the absence of any supervision over the manufacturing of the goods by the respondents. The apex court held that the household ladies could not be treated as hired labourers but as the manufacturers of goods. The above decision has been followed in Surindra Engg. Co. Ltd. v. Commissioner of Central Excise, Chandigarh-II [2003 (156) E.L.T. 811 (Tri.-Del.)], wherein the appel....