Independent job worker as manufacturer: supplying materials and designs alone does not shift central excise liability.

Fabrication of steel racks and trolleys by an independent job worker on job work basis was held to make the job worker the manufacturer, not the supplier of raw materials. The record showed the worker operated as a separate concern, undertook similar work for others, and bore responsibility for its own labour compliance; there was no proof that it was a dummy unit, agent, or hired labour under the appellant's control. Mere supply of raw materials, drawings, and designs did not by itself fasten central excise duty liability on the appellant. The duty demand and penalty therefore could not be sustained.

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Issues: Whether steel racks and trolleys fabricated through an independent job worker on raw materials and drawings supplied by the appellant could be treated as manufactured by the appellant for fastening central excise duty liability.

Analysis: The fabrication was carried out by M/s. Bonafide Industrial Works on job work basis. The record showed that the job worker was an independent concern doing similar work for others, and the work order indicated that the job worker was responsible for its own workers under ESI and PF laws. There was no evidence that the job worker was a dummy unit, an agent, or hired labour under the appellant's control. In these circumstances, supply of raw materials, drawings and designs by the appellant did not by itself make the appellant the manufacturer.

Conclusion: The job worker was the manufacturer and the appellant was not liable to pay duty on the goods so fabricated.

Final Conclusion: The duty demand and penalty could not be sustained, and the appeal succeeded.

Ratio Decidendi: Where fabrication is undertaken by an independent job worker on a principal to principal basis without proof of agency, dummy status, or control amounting to hired labour, the job worker is the manufacturer and the supplier of raw materials is not liable as manufacturer merely because it supplied materials, drawings, or designs.

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