Job work manufacturing liability: duty on steel ingots lay with the actual manufacturer, not the raw material supplier.

In a job-work arrangement for steel ingots, the job worker was treated as the actual manufacturer, so any duty on the finished goods could not be demanded from the supplier of raw material. Even if the supplier had not correctly followed Rule 57F(4) and the job-work notification procedure, the duty liability, if any, lay on the manufacturer of the ingots and not on the scrap supplier. The Tribunal also found no established violation with intent to evade duty, so the penalty on the supplier was not sustainable and the adverse findings were set aside.

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Issues: Whether duty on steel ingots manufactured by a job worker could be demanded from the supplier of raw material, and whether penalty could be imposed on the supplier when the job worker was the actual manufacturer.

Analysis: The raw material was supplied to the job worker, who converted it into steel ingots. In such a situation, the job worker is the manufacturer of the finished goods. Even if the supplier had wrongly followed the procedure under Rule 57F(4) and the job work notification, the duty, if any, was payable by the manufacturer of the ingots and not by the supplier of the scrap. The Tribunal also noted that there was no violation established with intent to evade duty.

Conclusion: Duty could not be demanded from the appellants, and the penalty was not sustainable; the findings against the appellants were set aside.

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