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of <h1>Job workers allowed to use materials other than principal manufacturer's for tax exemption eligibility</h1> The appeals were made against the denial of the benefit of Notification No. 214/86-C.E. to job workers for manufacturing 'Air heater block assembly' ... Job Work - Alleged that the material used by the job worker for manufacture of air-heater block assembly not supplied by the principal manufacturer and accordingly not entitle for benefit of Notification No. 214/86 ibid – Held that allegation was not correct and appellant entitle for the benefit of notification Issues:- Benefit of Notification No. 214/86-C.E. denied to job workers by lower authorities.- Interpretation of the definition of 'job work' under the Explanation to Notification No. 214/86.- Use of materials other than those supplied by the principal manufacturer by job workers.- Requirement of raw materials supplied by principal manufacturer for claiming exemption under Notification No. 214/86.- Essential character of the final product manufactured by job workers.Analysis:1. The appeals were made against the denial of the benefit of Notification No. 214/86-C.E. to job workers for manufacturing 'Air heater block assembly' supplied to a principal manufacturer. The lower authorities held that materials not supplied by the principal manufacturer were used, thus disqualifying the product from the Notification's benefit. The Tribunal's decision in Desh Rolling Mills case was cited, emphasizing the need for raw materials to be supplied by the principal manufacturer for claiming the Notification's benefit.2. The remand order highlighted that the definition of 'job work' allowed the use of materials other than those supplied by the principal manufacturer. The appellant argued that the issue in the present case was different from the Desh Rolling Mills case. The job worker had permission from the Assistant Collector for material supply and product receipt under the Notification. The Tribunal found that the materials independently sourced by the job worker were not 'raw materials,' and thus, the benefit of the Notification was upheld.3. It was undisputed that the principal manufacturer supplied plates and pipes, the raw materials, to the job worker. The job worker used additional materials like grinding wheels, nuts, bolts, and paints, but these did not impart essential character to the final product. The Tribunal clarified that a job worker could use materials other than raw materials supplied by the principal manufacturer for job work. As the essential character of the product stemmed from the supplied raw materials, the appeals were allowed, granting relief to the appellants.This judgment clarifies the requirements for job workers to claim benefits under Notification No. 214/86-C.E. and emphasizes the importance of raw materials supplied by the principal manufacturer in determining eligibility for such exemptions.
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