Excise duty on job-work extracted silver sludge not leviable where the appellant itself did not manufacture the sludge.

Broken glass/cullets were sent to a job worker for extraction of silver sludge, and the job worker carried out the extraction while retaining the sludge and returning the glass. On these undisputed facts, the appellant did not itself undertake the manufacture of silver sludge. As excise duty can be fastened only where the assessee is the manufacturer, duty was not leviable on the appellant in respect of the silver sludge.

---

---

Issues: Whether the appellant was liable to central excise duty on silver sludge allegedly cleared by it, when the broken glass/cullets were sent to a job worker who abstracted the silver sludge and retained it.

Analysis: The material facts were undisputed that the broken glass was sent to the job worker for extraction of silver sludge, and that the job worker performed the extraction and retained the silver sludge while returning the broken glass to the appellant. On these facts, the activity of manufacture of silver sludge was not undertaken by the appellant. In the absence of manufacture by the appellant, duty could not be fastened on it under the excise law.

Conclusion: The appellant was not liable to pay duty on the silver sludge.

---