Job-work manufacturing requires buyer-supplied raw material; trade mark use and pricing controls alone do not alter second-sale treatment.

A transaction is not treated as job-work manufacture merely because the buyer's trade mark appears on the bags, the buyer supplies packing material, or the agreement regulates tenders and pricing. Where the agreement does not show that the buyer supplied raw material or otherwise engaged the manufacturer to act on its behalf, the supply remains a sale by the manufacturer to the buyer. On that footing, the buyer's onward sales retain the character of second sales and are exempt from tax. A cited ship-construction precedent was held factually distinct and inapplicable.

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Issues: Whether the cement supplied by Hemadri Cements Limited to the assessee was manufactured on job-work basis so as to make the assessee's subsequent sales the first sale liable to tax, or whether the assessee's sales were second sales exempt from tax.

Analysis: The agreement did not show that the assessee supplied raw material to Hemadri Cements Limited for manufacture on its behalf. The use of the assessee's trade mark on bags, supply of bags by the assessee, and restrictions relating to tenders and pricing did not alter the character of the transaction. Clause 19, even if read as providing for credit of price difference, did not establish that the manufacture was undertaken for the assessee on job-work basis. The arrangement indicated a sale of cement by Hemadri Cements Limited to the assessee, and the assessee's onward sales therefore retained the character of second sales. The cited precedent on ship construction was factually distinct and inapplicable.

Conclusion: The sales effected by the assessee in respect of cement purchased from Hemadri Cements Limited were second sales and were exempt from tax; the Revenue's revision was rejected.

Ratio Decidendi: A transaction is not converted into job-work manufacture merely because the buyer's trade mark and packing material are used and the seller's pricing or tender participation is regulated, unless the buyer supplies raw material or the agreement otherwise shows manufacture on its behalf.

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