9911796707
|
Home
Issues:
1. Interpretation of Notification No. 119/75-C.E. regarding exemption for job work under Tariff Item No. 68 of the Central Excises and Salt Act, 1944. 2. Whether the twisting of three different types of yarn constitutes job work or manufacturing of a new product. 3. Determination of entitlement to exemption under the notification based on the nature of the job work and the resultant product. Analysis: The petitioner filed a petition seeking a writ of mandamus to direct the first respondent to grant exemption under Notification No. 119/75-C.E. for the job work done by them for the third respondent involving twisting different types of yarn. The first respondent contended that the twisting process resulted in a new product, not eligible for the exemption under Tariff Item No. 68. The petitioner argued that the twisting only changed the physical form of the materials, which were still identifiable, and all materials were returned to the third respondent without any addition from the petitioner. The petitioner relied on the decision in Madura Coats Limited v. Collector of Central Excise, West Bengal, where relief was granted for a similar job work involving yarn twisting. Another case cited was Kawality Coated Products v. Government of India, where bonding papers together did not attract duty. The respondents argued that the exemption applied only when a single article was supplied for job work, not multiple articles as in this case. They also highlighted ongoing disputes related to the cited cases. The court analyzed the notification's scope, emphasizing that the job work must involve handing over the article, carrying out the manufacturing process, and returning the article to the supplier. It was crucial that the product after job work retained the same character as the materials supplied. The court found that the twisting process did not create a new product but maintained the identity of the supplied materials. Therefore, the petitioner was entitled to the exemption under the notification. The court rejected the respondent's argument that the notification was limited to instances with a single article for job work, stating that the use of 'an' article did not restrict it to singular instances. The court applied the ordinary rule of construction, where 'singular' includes 'plural' unless specified otherwise. Consequently, the petitioner, who only performed a conversion job without altering the character of the materials, was deemed eligible for the exemption. As a result, the court granted the writ of mandamus in favor of the petitioner, making the Rule Nisi absolute without costs.
|
