2010 (10) TMI 1008 - AT - Central Excise

Summary

Issues involved: Interpretation of small scale exemption limit u/s Notification No. 16/1997 for goods manufactured by job workers, liability of duty on goods manufactured by job workers, consideration of job workers' clearances in assessing admissibility of exemption limit, determination of manufacturer for excise duty purposes based on job work arrangements, affixing of brand name on goods as manufacturing activity.

Summary:

Interpretation of small scale exemption limit: The case involved a dispute regarding the small scale exemption limit u/s Notification No. 16/1997 for goods manufactured by job workers. The Revenue contended that clearances by job workers for the appellant company should be considered in determining the admissibility of the exemption limit.

Liability of duty on goods manufactured by job workers: The appellant argued that since the goods were manufactured by job workers, no duty liability should be imposed on them. They also claimed that affixing the brand name on goods in their godown did not constitute manufacturing.

Consideration of job workers' clearances: The Revenue asserted that the goods manufactured by job workers should be included in the clearance value of the appellant company at their Silvasa unit. However, the Tribunal noted that the appellant had already discharged their duty liability for goods manufactured at their Silvasa unit and were entitled to small scale exemption for those goods.

Determination of manufacturer for excise duty purposes: The Tribunal emphasized that merely sending raw material to job workers for manufacturing did not make the appellant the manufacturer liable for excise duty. The job workers were considered the actual manufacturers in this case.

Affixing of brand name as manufacturing activity: The Tribunal concluded that affixing the brand name in the godown using a stencil did not constitute a manufacturing activity.

In the final decision, the Tribunal found no justification to confirm the duty demand or impose a penalty on the appellant. The appeal was allowed in favor of the appellant.