2017 (3) TMI 1091 - AT - Central Excise

Job-work - who is manufacturer-principal or job-worker - whether the respondent-assessee can be said to be a manufacturer for Parnala as the same is got manufactured by others on job work? - Held that - supply of raw material to another for manufacturing of goods with drawing/design and specifications, does not make the supplier a manufacturer of such goods, unless it is proved that the manufacturing was done by the assessee himself and such job workers were only dummy workers of the firms - appeal dismissed - decided in favor of respondent-assessee.

Summary

Issues:
Whether the respondent-assessee can be considered a manufacturer for 'Parnala' as it was manufactured by others on job work.

Analysis:
The respondent-assessee was engaged in the manufacture and clearance of excisable commodities, including 'Parnala,' which was manufactured by job workers. The Revenue observed that the respondent exceeded the specified SSI limit and issued a show cause notice proposing duty payment. The respondent claimed they only supplied cut iron sheets for Parnala manufacturing. The appeal was adjudicated, confirming the duty demand and penalty. The respondent appealed, contending that the job workers were the manufacturers, not them.

The Ld. Commissioner (Appeals) allowed the appeal, noting that the job workers were the manufacturers of Parnala, not the assessee. The assessee provided evidence of job charges paid, delivery of raw materials, and job workers operating on a principal to principal basis. The Commissioner found the job workers were not dummy laborers but independent manufacturers. Legal precedents were cited to support the decision. The Revenue appealed, relying on the grounds of appeal and the Order-in-Original.

The Tribunal found no evidence in the show cause notice or previous decisions indicating the respondent-assessee was the manufacturer of Parnala. It was held that supplying raw materials for manufacturing does not make one a manufacturer unless it is proven that the manufacturing was done by the supplier. Since the job workers were independent manufacturers, the appeal by the Revenue was dismissed, granting consequential benefits to the respondent-assessee if applicable.