K.C. Agarwal, J.
1. This is a petition under Article 226 of the Constitution for a Writ of Mandamus seeking a prayer for quashing the notices dated December 10, 1975, and June 7, 1976, sent by the Superintendent, Central Excise Shikohabad, District Mainpuri calling upon the petitioner Company to obtain Central Excise Licence under Rule 174 of the Central Excise Rules, 1944.
2. The petitioner is a Company incoporated under the Companies Act, 1956. It carries on business of manufacture and sale of diverse electrical and electronic articles, including lamps and components. It has its own factories at various places in the country where the goods are manufactured: The petitioner holds licences in respect of excise goods which are manufactured by it at various factories. It pays excise duty on such goods under the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act'). Besides manufacturing its own lamps at its factory at Thana (Bombay), the petitioner also purchases electric lamps and tubes from Hind Lamps Limited (briefly stated as 'the company'), having its registered office and factory at Shikohabad. The said Company carries on business of manufacture and sale of electric bulbs, fluores cent lamps, miniature bulbs and components of its bulbs and lamps etc. At its factory at Shikohabad, the company sells lamps and tubes, referred to above, to the petitioner and other leading Companies such as M/s Bajaj Electricals Limited, Crompton Greaves Limited, General Electric Company of (India) Limited and Mazda Lamps Company. Sales of the goods by the Company to the petitioner and other customers, referred to above, is on principal to princi pal basis in the ordinary course of business. The Company manufactures goods according to its own schedule, budget, capacity, availability of raw materials, supply of power and maximum supplies to customers, against their orders. The lamps manufactured by the Company are supplied to its various customers, including the petitioner. These lamps are, however branded defferently in accordance with the agreement which the Company has with its customers. These specifications are not stipulated by the customers but are the Company's own specifications conforming generally to the Indian Standard Specifications. The entire production of lamps is under the exclusive control and management of the Company.
3. The case of the petitioner was that it had not engaged the Company nor was the Company its contractor for the manufacture of any one of its goods The Company was also not agent of the petitioner. Under the Act or the rules made thereunder every manufacturer of an excisable article is required to obtain a licence. As the petitioner was not a manufacturer of the lamps purchased by it from the Company, it did not obtain any licence with respect to the said, lamps.
4. In October 1975, a Trade Notice No. 236 of 1976 was issued by the Collector Central Excise, Kanpur, to the Superintendent, Central Excise, calling upon him to insist on obtaining of manufacturing licence by persons who had no factories of their own and who got excisable goods manufactured in the duly licenced factories according to their own specifications, under their own brand names or trade names... The Collector's view was that in the light of the revised definition of the term .'Manufacturer' under Section 2(f) of the Act, a person falling in the aforesaid category was required to obtain a manu facturing licence under Rule 174 of the Rules made under the Act.
5. By a letter dated December 10, 1975, the Superintendent of Central Excise, Shikohabad, called upon the petitioner to obtain a licence under Rule 174 in respect of the lamps and other articles purchased by it from the company. The petitioner replied to the said letter on December 26, 1975, and denied its liability under the Act and the Rules framed thereunder to obtain a manufacturing licence under Rule 174. The petitioner's case was that the petitioner not being a manufacturer within the meaning of the word, as defined in Section 2 (f) of the Act, in respect of the goods purchased from the Company, it was not required to obtain a licence under the Act or the Rules framed thereunder. The petitioner, however, received another notice dated June 7, 1976, calling upon the petitioner and certain other parties to obtain a licence under Rule 174. Thereafter, the petitioner filed the present writ peti tion challenging the said two notices dated December 10, 1975, and June 7, 1976 requiring the petitioner to obtain a licence. The petitioner's case was that the insistence of the Excise Authorities to obtain the licence under Rule 174 of the Rules was unjustified, and that the petitioner not being a manufacturer could not be called upon to obtain such a licence in respect of the goods purchased from the company viz. Hind lamps.
6. The Writ petition has been contested by the Central Excise Author ties. The case taken in the counter affidavit is that the transactions between the petitioner and the Company are not that of a purchaser and seller. M/s Hind Lamps Limited is controlled and managed by the petitioner and that since the lighting bulbs and fluorescent tubes are not only manufactured in accordance with the specifications and orders placed with the Company but also the trade name given is that of the petitioner, the petitioner is a 'manufacturer' and as such, liable to obtain the licence. For deciding the point relating to the require ment of obtaining the licence it is necessary to refer to the definition of the word' 'manufacturer' given in the Act. The definition of 'manufacturer' under Section 2 (f) of the Act, as it stood before amendment made by Finance Act No. 5 1964, was as under:
'manufacturer includes any process incidental or ancillary to the completion of manufactured product... The word 'manufacturer' shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in theii production or manufacture on his own account if those are intended for sale.'
By Finance Act No. 5 of 1964, the definition of the word 'manufacturer' was amended. Section 60 of the said Act provided that the words, 'beginning with' and the word 'manufacturer' and ending with 'are intended for sale' shall be omitted. After amendment, the definition will read as under :
'Manufacture includes any process incidental or ancillary to the completion of a. manufactured product... The Word'manufacturer'shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods but also any person who engages in their production or manufacture on hit own account.'
At this place, reference may also be made to Rule 174 of the Rules fra med under the Act in accordance with which the case of the Central Excise, is that the petitioner was required to obtain a licence. Under this Rule, every manufacturer is required to take out a licence and is not authorised to conduct his business in regard to such goods other than by the authority and subject to the terms and conditions of a licence granted ' by a duly authorised officer ia the proper form.
7. It appears that the amendment in the definition of the word 'manu facturer' given in Section 2 (f) was made on account of the controversy as to whether a person not manufacturing goods for sale was also required to obtain a licence. By the amendment, the words 'if they are intended for sale' were dropped. As a result thereof, no scope for argument was left that a person manufacturing goods not intended for sale, was not required to obtain a lic ence. The distinction between 'manufacture of goods for sale' and 'manu facture of goods for one's own purpose other than sale' ceased to exist. The amendment, therefore, made by Finance Act, No. 5 of 1964 does not make any material difference in the interpretation of the word 'Manufacturer' except ing for taking within its purview also those persons who manufactured goods on his own account irrespective of the fact as to whether the goods manu factured were meant to be sold or not.
8. The definition of the word 'manufacturer' lays down two categories of persons who would fall within its ambit. The first category would consist of all those persons who bring into existence or make or fabricate an article or a product by employing his own hired labour needed for the production or manufacture of excisable goods. The second category would, however, be com prised of those persons who do not directely employ their own labour but engage themselves in production or manufacture of goods on their own account. In the instant case we are not concerned with the first category of persons as admittedly the case of the petitioner would fall, if at all, within the second category. As already noted above, the Central Excise has taken a stand that since the manufacturing and marking of the brand names on the bulbs and fluorescent tubes of the petitioner's trade name, attracts the provisions of Section 2 (f) of the Act, the petitioner would be deemed to be .engaged in the manufacture of these articles.
9. The words which require consideration for understanding the true scope are 'engages', 'production', 'manufacture', 'and on his own account'. Taking these words together, it appears to us that he must be a person, though not owning a factory, nor himself doing the manufacturing process be consi dered to be a manufacturer, if he was a person by whom or under whose direction and control the articles or materials are made. In order to bring a person within the ambit of this clause, it is necessary that a person gets the goods manufactured by others under his direction and control. If a person simply places orders with a company for getting certain goods manufactured according to his specifications and details, such a person would not be consi dered a manufacturer inasmuch as the owner of a factory alone could be said to be engaged in the manufacturing activity 'on his own' within the meaning of Section 2 (f) of the Act.
10. In a case where a company requiring certain goods piaces orders for manufacturing articles according to its requirements, such a company cannot be said to have hired any labour and also does not have any control over the working of the manufacturing concern, hence such a company will not be considered to be a 'manufacturer' within the definition of the term given in Section 2 (f) of the Act. A person placing orders for manufacturing of articles would only be a buyer and thus cannot be the manufacturer. Simply because the goods manufactured in accordance with the requirements of the buyer, complying with his standard, the same would not make him a manu facturer inasmuch as such a person does not engage himself either in manu facture or production of goods on his own account. He does not incur any financial involvement needed for manufacturing or producing the goods and also does not have any control or supervision over the manufacturing process. Manufacturing company was not a dummy company nor a buyer placing orders for its manufacturing could be considered to be a manufacturer. It is only if those who own a factory are a dummy concern or a camouflage for the buyer of goods produced, that the latter can be considered to be a manu facturer.
11. Great emphasis, was, however, laid by Shri Chand Kishor on behalf of the Central Excise on the fact that since the manufacturing and making of the trade names on the bulbs and tubes are those of the petitioner, and that the name of the manufacturing Company, i.e., Hind Lamps Limited, is not put on any of the goods, the petitioner company should be considered to be a manufacturer within the meaning of Section 2 (f). The submission made does not appeai to be correct.
12. A trade mark is only a sign, device, or mark by which the articles produced are dealt in by a particular person or organisation. The objects of a trade mark are to point out distinctly the orgin or ownership of the article. It is only a business autograph of the owner, amounting to a representation, ind icating the connection in the course of trade between the goods and the person having a right to use the trade mark. The use of a trade mark does not neces sarily nor as a matter of law import that the articles on which it is used are manufactured by its user. It may be enough that they are manufactured for him, that they pass through his hands in the course of trade, and that he gives to them the benefit of its reputation or of his name or business style. Trade marks and manufacture of goods are two different concepts. They should not be inter mixed, and a person using a trade mark need not be considered to be a manufacturer.
13. 'In Writ petition No. 3306 of 1958, Ganga Dhar v. Collector, Central Excise-1979 E. L. T. (J 597), the petitioner manufactured and sold vegetable oils. He also supplied his own stock of oil seeds and manufactured oil out of these seeds. The petitioner paid manufacturing charges. The question arose as to whether the petitioner was a manufacturer under the Central Excise Act. A learned Single Judge held that the owners of the Mills, and not the petitioner, were manufacturers of the oil manufactured out of the seeds supplied by the petitioner. The view of the High Court was that the petitioners had simply paid crushing charges to the oil mills and, as such, he could not be considered to be a manufacturer.
14. Applying the ratio of the aforesaid case, with which we respectfully agree, we find that it is only a person who did the manufacturing that could be considered to be a manufacturer. If the stand of the Central Excise is accept ed, the same would result in making two persons as manufacturers of the same commodity whereas there cannot be more than one. Mere fact that a manufac turing company produces goods bearing brand name of the customer company, and the customer company sells the goods with that brand name, these facts did not make the customer company a manufacturer.
15. Counsel for the Central Excise also suggested that since one of the Directors of M/s. Hind 'Lamps Ltd,, was a director of M/s. Philips India Limited, the former company should be deemed to be controlled by the latter. Placing reliance on this circumstances, counsel urged that M/s. Hind Lamps Limited is only a dummy company and, as such, for all intents and purposes, the petitioner company should be deemed to be a manufacturer. The circum stances pointed out by learned counsel for the respondent is not relevant for treating M/s. Hind Lamps Limited as a dummy company. A person being a director of two companies is not indicative of the one company being dummy for the other. These are two distinct legal bodies. In Writ petition No. 2189 of 1973, Hind Lamps Limited, v. Union of India-1978 E.L.T. (J 78), a Division bench of this Court had gone into this matter when the same had been raised in connection with the liability of the excise' duty. The Bench held that M/s. Hind Lamps Limited was clearly a separate legal entity and w carrying on business on its own account.
16. For the reasons given above, the writ petition succeeds and is allo wed. with costs. We direct the respondents to withdraw the notices dated December 10, 1975 and June 7, 1976, and to desist from taking any action against the petitioner for failing to obtain a licence under the Central Excise and Salt Act.