Job work classification under excise rules upheld for parts made to manufacturer specifications, with duty-free removal of moulds and dyes.

Suppliers manufacturing washing machine parts to the assessee's design, purchase orders and specifications were treated as job workers, even though they used their own raw materials. Rule 57S(8) of the Central Excise Rules, 1944 was applied as a non obstante provision permitting removal of moulds and dyes without payment of duty to the job worker's premises for production on behalf of the manufacturer and in accordance with the manufacturer's specifications. The Revenue's challenge failed and the relief granted to the assessee was upheld.

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Issues: Whether the suppliers manufacturing washing machine parts according to the assessee's design and specifications could be treated as job workers, and whether Rule 57S(8) of the Central Excise Rules, 1944 permitted removal of moulds and dyes without payment of duty to such job workers.

Analysis: The Tribunal held that the suppliers were undertaking manufacture on job-work basis because the parts were produced as per the assessee's purchase orders, design and specifications. It further held that the fact that the suppliers used their own raw materials did not take them out of the category of job workers. Rule 57S(8), being a non obstante provision, empowered removal of moulds and dyes without payment of duty to the premises of the job worker for production of goods on behalf of the manufacturer and according to the manufacturer's specifications.

Conclusion: The challenge by the Revenue failed and the order granting relief to the assessee was upheld.

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