2026-VIL-1370-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Determination of status as manufacturer vs trader - Applicability of representations made to secure business orders - The appellants were engaged in the business of trading and supplying goods and represented themselves to Power Supply Corporations as manufacturers for the purpose of securing orders – Dept alleged that the appellants were actual manufacturers and demanded duty invoking extended period - Whether the appellants were manufacturers or traders of the goods in question and whether Central Excise duty should be demanded from them based on their representations as manufacturers to Power Supply Corporations - HELD - The determination of whether a person is a manufacturer must be based on the definition under Section 2(f) of the Central Excise Act, 1944 and not merely on the basis of representations made to procure business. The representations made to Power Supply Corporations were made only for the purpose of securing orders and did not reflect actual manufacturing activity. The job workers were the actual manufacturers of the goods - The appellants did not have the infrastructure to manufacture the goods as evidenced by the inventory and an independent Chartered Engineer also confirmed that the machinery had been lying unused for many years and the commodities could not be manufactured using such equipment - The activities undertaken by the appellants would not amount to manufacture and hence the demand of duty in the normal period itself was not sustainable. The question of invoking extended period for demanding duty did not arise. The allegations of suppression could not be sustained and no penalty was imposable on the appellant company or its authorized representative - The demand of duty, interest and penalty against the appellant company are set aside and the appeals are allowed
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