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TMI Blog1983 (6) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... in a licence under Section 6 of the Act read with Rule 174 of the Central Excise Rules, 1944 (hereinafter referred to as the Rules), notwithstanding that, admittedly, they were fabricating the aforesaid gates without the aid of power employing more than 49 workers; (c) a notice dated 12-4-1977 was accordingly issued to the Appellant requiring the Appellant to show cause - (i) why a penalty should not be imposed on the Appellant; and (ii) duty amounting to ₹ 20,860/- due on the goods should not be demanded under Rule 173Q of the Rules; (d) in reply the Appellant stated, inter alia, that - (i) the Appellant was not directly connected with the manufacture of goods for sale inasmuch as they manufacture different shapes of finished goods of other Departments and as such they were not liable to pay excise duty or observe any of the formalities under the Act and the Rules. The materials were supplied to the Appellant by the respective Departments of the Government of Orissa and the Appellant had merely undertaken the job-work. The ownership of the materials at all times remained with the State of Orissa and consequently the finished goods as well. The Appellant is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,86,000/- as the gates have been reported to have been removed prior to 23-11-1977. He also imposed a penalty of ₹ 250/- for violation of Rules 173Q of the Rules and for manufacture of goods without licence; (g) in appeal the aforesaid order of the adjudicating officer had been confirmed; and the instant Revision is the sequel. 2. It has been contended before us, inter alia, that - (a) the Appellant is not directly connected with manufacture of goods for sale as alleged; the goods made to order in accordance with particular specifications are not saleable as such; (b) there has been no manufacture since there was no qualitative change and no mass production; (c) had the contract been looked into it would have shown clearly that the ownership in the raw materials was vested at all material times in the Sate of Orissa and the Appellant merely undertook the job of fabrication; (d) the Appellant was never the owner of the gates in question and consequently he is not a manufacturer as defined in Section 2F of the Act; (e) the gates made by the Appellant are not exigible to duty i.e. imposed on manufacture of iron and steel products out of iron in a primary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a distinct name, character and use; (ii) for a manufacture to take place neither standardised mass production nor actual sale in the open market is either essential or relevant; (iii) nor is ownership either in the raw materials or the finished products decisive in determining whether a manufacture had occurred or not. Even if, it may be that the raw materials as well as the finished product belong to someone else, the actual fabricator does not cease to be a manufacturer in accordance with the definition thereof in the Act. Once, therefore, the Appellant had brought into existence the gates, admitted to be goods, by fabrication either for himself or for others, it cannot be contended that he is not a manufacturer himself, just because the owner of the gates is someone else; (d) while it may be that the gates themselves are not made out of iron in a primary form but by use of duty paid iron and steel sheets, still, when the gates had been manufactured, they are assessable to duty, not as iron and steel products made out of iron in a primary form, nor even as iron and steel sheets falling within Item 26AA of the First Schedule to the Act, but as goods falling within It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above cases, it has been held that the benefit of Notification No. 119/75 cannot be denied merely because the material supplied by the customers has undergone such a change at the hand of the job-worker that it emerges into a new article. The courts in this regard have rejected departmental contentions for the simple reason that there cannot be a question of exemption from duty unless some process amounting to manufacture attracting excise duty is applied by the job-worker. The Gujarat High Court in specific words has held as under :- 7. It is clear that, by this Notification, goods falling under Item 68 of the First Schedule manufactured in a factory as a job-work are exempted from excise duty, except to the extent of the duty on charges for the job-work. The Explanation set out in the Notification makes clear what is meant by `job-work and job-work, in the context of this Notification, means such items of work where the article intended to undergo manufacturing process is supplied to the job-worker and that article is returned by the job-worker to the supplier after the article has undergone the intended manufacturing process, charging only for the job-work done by hi ..... 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