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2023 (5) TMI 78 - AT - Central ExciseLevy of Excise Duty - Job-Work - independent manufacturers having little or no supervision by the assessee company - HELD THAT - It is held in COMMISSIONER OF CENTRAL EXCISE, KOLKATA II VERSUS M/S. COMET TECHNOCOM (P) LTD. ORS. 2020 (2) TMI 306 - CALCUTTA HIGH COURT , that if the job workers are proved to be independent contractors with little or no supervision by the assessee then they are the manufacturers and the liability of paying excise duty is with them. From the above it would be evident that in the present case, the job workers of the assessee company were independent contractors/manufacturers and hence, the assessee company and/or its directors cannot be saddled with any liability of payment of excise duty and/or consequential penalty with respect to the goods so manufactured by the said job workers. Appeal allowed.
Issues involved:
The issues involved in this case revolve around determining whether the job workers were acting as independent contractors or as agents of the assessee company, thus impacting the liability for payment of excise duty. Issue 1: Tribunal's initial decision and subsequent High Court order: The Appellate Tribunal initially allowed the Assessee's appeal and rejected Revenue appeals, setting aside the original order. However, the Hon'ble High Court directed the Tribunal to rehear the issue, emphasizing the distinction between a manufacturer and an agent of the manufacturer in determining excise duty liability. Issue 2: Job workers' status and liability for excise duty: The core issue is whether the job workers were acting as agents under the supervision and control of the assessee, making the assessee the real manufacturer liable for excise duty, or if the job workers were independent contractors with minimal supervision, making them the manufacturers responsible for excise duty payment. Issue 3: Tribunal's scope of remand and determination: The Tribunal's remand focused on establishing whether the job workers were independent manufacturers or agents of the assessee, based on the level of supervision and control exercised by the assessee over the manufacturing process. Issue 4: Commissioner's findings on job workers' independence: The Commissioner's Order highlighted that the job workers were independent manufacturers with little to no supervision from the assessee, as evidenced by their own statements during cross-examination regarding their independent processes and lack of control by the assessee. Issue 5: Legal precedents and High Court decision: The Commissioner relied on legal precedents such as Ginne Steels Private Limited Vs. CCE and ORG System Vs. CCE to support the conclusion that independent contractors with minimal supervision are considered manufacturers liable for excise duty. The High Court upheld this principle in its decision. Conclusion: Ultimately, the Tribunal's decision was remanded, and after reevaluation, it was determined that the job workers were independent contractors, making them responsible for excise duty payment. As a result, the Assessee's appeals were allowed, and the Revenue's appeals were rejected, providing relief to the Assessee company and its directors.
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