Mere supply of transmission line accessories and hardware fittings doesn’t amount to manufacture

S.A. Enterprise Vs Commissioner of Central Excise (CESTAT Kolkata)

CESTAT Kolkata held that duty demand on supply of transmission line accessories and hardware fittings unsustainable as the same is only supply and not manufacture. Further, revenue couldn’t adduce any evidence of clandestine manufacture.

Facts- The appellant firm, a supplier of transmission line accessories and hardware fittings, used to submit bids when tenders were floated by different power supply corporations across India. The appellant firm also used to deal with various private parties. It was stipulated in the tenders/contracts of the power supply corporations that orders will be placed on the manufacturers. The appellant used to represent and declare to the power supply corporations that it was a manufacturer and that its premises at 207/7, Belilious Road, Howrah-1 was its factory/place of manufacture. However, the appellant firm had not been registered with the Central Excise authorities.

Officers conducted investigations into the activities of the appellant firm. In the course of the said investigation, the appellant firm had clarified that it had not undertaken the manufacture of any goods sold to the aforesaid power supply corporations, though it had represented itself as a manufacturer to them. The appellant also submitted copies of its purchase records, particulars of the suppliers, copies of records in respect of job workers, particulars of the job workers, particulars of the goods sold etc. and further clarified that it did not have any trade mark or brand name. The appellant also made over two post-dated cheques for an aggregate sum of Rs. 10.50 lacs. Subsequently, the appellant’s constituted attorney clarified in his statements dated 24.05.2010 and 01.12.2010 that such payment had been made under misconception and to buy peace.

On conclusion of investigation, the officers were of the opinion that the appellant firm was a ‘manufacturer’ and not a trader. A show cause notice was issued to the appellant firm alleging that it had always declared to its customers that it was a manufacturer of transmission line accessories and hardware fittings, but to evade payment of Central Excise duty, the appellant firm had been showing the goods manufactured by it as traded goods.

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