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TMI Blog2013 (2) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... g. Therefore, it has to be converted into cone form before it can be used for weaving. The process of conversion of yarn from cake form to cone form is similar to the processes specified in Note 3 to Chapter 54 and therefore, the said activity would amount to ‘manufacture’ in our view. It would be evident that it is M/s. Shristi Textiles who are the manufacturers of VFY in cone form and not the appellant who has supplied VFY in cake form and all other materials required for the manufacture including capital goods. The expression “manufacture of filament yarn” was explained as manufacture of filament of organic polymers produced by polymerization of organic monomers, such as, polyamides, polyesters, polyurethenes, or polyvinyl derivati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity undertaken by the job worker does not amount to manufacture and therefore, the benefit of the aforesaid Notification is not available. The appellant clears the goods from the depot and department has demanded duty on the value of the VFY cleared in cone form at the depot. The demand of ₹ 2,69,20,859/- has been confirmed against the appellant for the period 2005-06 to February, 2010 and another demand of ₹ 69,43,205/- have been confirmed for the period March, 2010 to December, 2010. Apart from the above, interest on the demand of duty has also been confirmed and a penalty of ₹ 2,69,20,859/- has been imposed under Section 11AC of the Central Excise Act apart from another penalty of ₹ 7.00 lakhs under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required for the conversion including packing materials have been supplied by the appellant and even the capital goods required for undertaking the process have also been supplied by the appellant. Therefore, the job worker s premises should be treated as an extension of the appellant s factory. If that is done, it may be seen that the benefit of Notification No. 30/2004-C.E. could not have been claimed. Inasmuch as the appellant has cleared the goods from the job workers factory to the depot from where the goods have been sold i.e. the value which is relevant for discharge of excise duty liability is the transaction value at the depot and accordingly, he submits that the demand is sustainable in law. 6. We have carefully considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay v. Maharashtra Fur Fabrics Ltd. reported in 2002 (145) E.L.T. 287 (S.C.) considered a similar issue in the case of sliver pile fabrics falling under Heading 5801 or 60.01 of the Central Excise Tariff. There was duty liability on the said goods if they were subjected to the process of bleaching, dyeing, printing, shrink proofing, tendering, heat-setting, crease resistant processing or any other process or any two or more of these processes. The appellant undertook the process of stentering on the fabrics and claimed benefit of exemption on the ground that the process undertaken is not specified in the Notification. In that context, the Hon ble Apex Court held that the expression or any other process will have to be understood in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in every job work, manufacture has to be carried out as per price indicated by raw material supplier and as per the specifications laid down by raw material supplier who has a right to inspect and draw samples at each stage to ensure standards prescribed by him are being followed, the loan licensee cannot be said to be a manufacturer and it is the job worker who undertook the job work is the manufacturer. The said decision of the Tribunal was upheld by the Hon ble Apex Court reported in 2010 (258) E.L.T. A72 (S.C.). 13. The Hon ble Bombay High Court in the case of CCE v. Mahyco Seeds Ltd. reported in 2005 (182) E.L.T. 163 (Bom.) held that in a case where raw materials are supplied for stitching of bags, the raw material supplier cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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