2002 (2) TMI 880 - AT - Central Excise

Summary

Issues:
1. Duty confirmation and penalty imposition for manufacturing goods on job work basis without payment of duty.
2. Applicability of small-scale exemption notification and duty payment requirement for goods manufactured on job work basis.
3. Compliance with Notification No. 214/86 regarding raw material supply and job work manufacturing.

Analysis:
1. The judgment confirms the duty of Rs. 1,00,079.00 and a penalty of Rs. 20,000.00 on the appellants for manufacturing goods on job work basis without paying duty. The Revenue argued that goods manufactured on job work basis should also attract duty, as per the small-scale exemption notification. A portion of the demand was confirmed for manufacturing goods with other brand names without paying duty, which was not challenged.

2. The appellants, benefiting from the small-scale notification, did not include the value of goods manufactured from raw materials supplied by other companies. The Tribunal noted that the raw material suppliers did not follow Notification No. 214/86, which allows manufacturers to send materials to job workers under certain conditions. As the suppliers were not manufacturers, they could not provide the required undertaking to the Assistant Commissioner, leading to non-compliance with the notification.

3. The Tribunal found that the job worker can be considered the manufacturer in the absence of relevant notifications. It was established that the goods manufactured by the appellants using supplied raw materials were ultimately used by the original raw material supplier in the final product manufacturing. As a result, the appeal was rejected, upholding the duty confirmation and penalty imposition for not following the duty payment requirements for goods manufactured on job work basis.