ORDER
P.K. Kapoor, Member (T)
1. This is an appeal against the order dated 18-6-1991 passed by the Collector, Central Excise (Appeals) Ahmedabad.
2. Briefly stated the facts of the case are that the respondents entered into a contract with M/s. Usha Prestressed Concrete for the fabrication/manufacture of prestressed concrete poles. The contract was termed as ‘job work contract’ and it provided that the raw material like Cement, H.T. Steel Wire, Mild Steel and G.I. Wires were to be supplied by the Board. It also provided that the wages of unskilled labour were to be controlled by the Board and the quality control of the goods was to be ensured by the Board. The respondents were also prohibited from fabricating any poles for any other party in their factory premises. By his order dated 28-3-1990 the Assistant Collector held that in view of the fact that Gujarat Electricity Board had complete control over the manufacturing programme and production of prestressed concrete poles and contractors were merely job workers getting labour charges for the manufacture of poles, the Board was to be deemed as having been engaged in the production of goods on their own account and accordingly in terms of Section 2(f) they were to be deemed as ‘manufacturers’. He therefore, confirmed the demand raised against the respondents. In appeal, the Collector (Appeals) reversed the finding of the Assistant Collector on the grounds that a person could not be regarded as manufacturer merely because he supplied the raw materials or the goods were manufactured as per his specifications by the job worker on payment of job work charges, unless the actual manufacturer is found to be a dummy of the supplier of raw material and works under his supervision and control. On these grounds and on the ratio of the Tribunal’s judgment in the case of Kerala State Electricity Board v. Collector Cochin -1990 (47) E.L.T. 62 (Tribunal) which was upheld by the Supreme Court vide order dated 12-3-1990 while dismissing the Civil Appeal No. 140 of 1989 filed by the Collector of Central Excise, Cochin against CEGAT Order No. 91/88, dated 1-2-1988, the Collector allowed the appeal filed by the respondent.
3. Appearing on behalf of the Revenue, Shri Mohan Lai, JDR submitted that the Collector (Appeals) had erred in relying upon the Tribunal’s decision in the case of Kerala State Electricity Board v. Collector, Cochin. He contended that in the present case the Electricity Board had to be deemed as the ‘manufacturer’ since the raw material was supplied by them and in terms of the conditions stipulated in the contract the wages of unskilled labour were to be controlled by the Board and complete quality control in respect of the product was also exercised by the Board. He contended that under these circumstances the Tribunal’s decision in the case of Kerala State Electricity Board was distinguishable. In support of his contention he placed reliance on the Tribunal’s decision in the case of Superintending Engineer v. Collector of Central Excise, reported in 1992 (59) E.L.T. 610. In support of his submission he also cited the decision of the Tribunal in the case of Andhra Pradesh State Electricity Board, Hyderabad v. Collector of Central Excise, Hyderabad, reported in 1984 (16) E.L.T. 579.
4. On behalf of the respondent Shri K.A. Sindhi, Learned Consultant submitted that there was no infirmity in the finding of the Collector (Appeals). He stated that Gujarat State Electricity Board could not be deemed as a manufacturer merely because they had supplied raw material and had ensured quality control. He stated that the Tribunal’s decision in the case of Superintending Engineer v. Collector (supra) relied upon by the JDR was not relevant since in that case the contractor was carrying out work on behalf of Irrigation Department on payment of labour charges and the Tribunal had held that the ratio of the order in the case of Kerala State Electricity Board was not directly applicable to the facts of that case. Learned Consultant added that the Tribunal’s decision in Andhra Pradesh State Electricity Board, Hyderabad v. Collector of Central Excise, Hyderabad (supra) relied upon by the Learned JDR was also not relevant since in that case contractor was supplying labour for the manufacture of reinforced concrete cement poles in the unit of the Electricity Board and it was held that he was neither a job worker nor manufacturer.
5. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen from the Order-in-Original that in terms of the contract between Gujarat Electricity Board, Baroda and the contractors incorporated the following :
“(i) This is a job work contract. .
(ii) The raw materials like Cement, H.T. Steel Wire, Mild Steel and G.I. Wires would be supplied by the Board.
(iii) The wages of unskilled labour would be controlled by the Board.
(iv) The transaction would not be subject to Sales-tax under the Gujarat Sales Tax Act, 1969 as the poles would be manufactured from the Board’s materials.
(v) M/s. Usha would not be permitted under any circumstances to fabricate any poles for any other party in their factory premises.
(vi) The quality control would also be governed by the Board.”
6. On a perusal of these conditions we are inclined to agree with the Collector (Appeals) that prestressed concrete poles were being fabricated by the contractors on job work basis and apart from providing the raw material the Board was also exercising quality control in respect of production. We are therefore inclined to agree with the Collector (Appeals) that merely because the Electricity Board was supplying raw materials the prestressed concrete poles were manufactured as per their specification through the actual manufacturer or job worker on payment of job work charges, unless the actual manufacturer/job worker was a dummy of the supplier of raw material and was working on their behalf, the supplier of raw material could not be deemed as manufacturer of the goods. We also agree with the finding of the Collector (Appeals) that in view of the facts of the case the matter is covered in favour of the respondent by the Tribunal’s decision in the case of Kerala State Electricity Board (supra) which was upheld by the Supreme Court vide order dated 12-3-1990 while dismissing the Civil Appeal No. 140/1989 filed by the Collector of Central Excise, Cochin against Tribunal’s Order No. 91/88, dated 1-2-1988. In the case of Superintending Engineer v. Collector of Central Excise (supra) on which reliance has been placed by the Id. DR, the facts were different, since as held by the Tribunal the contractors had carried out the work on labour charges on behalf of the Irrigation Department and the production of goods was not done on principal to principal basis. The Tribunal had also observed that the terms of the Agreement and ratio of M/s. Kerala State Electricity Board’s case was not directly applicable to the facts of that case. We also find that the Tribunal’s decision in the case of Andhra Pradesh State Electricity Board, Hyderabad v. Collector of Central Excise, Hyderabad (supra) relied upon by the Id. DR does not help the Revenue’s case since in that case concrete cement poles were being manufactured in the units of the Electricity Board and the contractors were only supplying labour for the manufacture of the poles.
7. In view of the foregoing, we follow the Tribunal’s decision in the case of Kerala State Electricity Board (supra) and hold that there is no merit in the appeal.
8. In the result, the appeal filed by the Revenue is rejected.