Manufacturer not liable for excise duty on job work due to supplier compliance with duty requirements

The Tribunal held that M/s. Pioneer Enterprises were not liable to pay excise duty on the goods they manufactured as job work for M/s. Aero Club, as the raw material supplier had fulfilled the duty liability requirements under Notification No. 214/86. The Tribunal found that the necessary intimation was sent to the Asstt. Commissioner, and the duty was discharged on the goods. Consequently, the appeal was allowed, and the impugned order was set aside in favor of M/s. Pioneer Enterprises.

---

---

Issues involved:
Whether duty of Excise is payable by M/s. Pioneer Enterprises on excisable goods manufactured by them.

Analysis:
The appeal filed by M/s. Pioneer Enterprises raised the issue of whether they are liable to pay excise duty on the goods they manufactured. The appellant, represented by Shri J.S. Agarwal, argued that they undertook job work for M/s. Aero Club, who supplied raw materials and undertook the duty liability as per Notification No. 214/86. They provided documentary evidence that duty was discharged by the raw material supplier. On the other hand, Shri A.S. Bedi, representing the respondent, contended that the conditions of the notification were not fulfilled as there was no intimation received by the jurisdictional authority. He relied on legal precedents to support his argument that the job worker, not the raw material supplier, is considered the manufacturer. The appellant cited a case where duty liability would lie on the raw material supplier for non-compliance with notification conditions.

The Tribunal analyzed Notification No. 214/86, which exempts goods manufactured as job work and used in relation to final products specified in the notification. The Tribunal noted that M/s. Aero Club had sent an intimation to the Asstt. Commissioner, as required by the notification, and the appellants had declared their job work basis under Rule 173B. It was observed that the raw material supplier had discharged duty liability on the goods cleared from the appellants' factory. Therefore, the Tribunal held that the benefit of the notification applied to the goods manufactured and cleared by the appellants for M/s. Aero Club, setting aside the impugned order and allowing the appeal.

---