Excise duty liability follows the principal-agent substance of a job-work arrangement where factual findings are not perverse.

An arrangement with a job worker will not avoid excise duty where the substance shows the appellant supplying raw materials and retaining the role of principal, with the job worker acting only as processor or agent. On the facts recorded, the tribunal's findings were not shown to be perverse, and no substantial question of law arose for interference. The result was that the excise duty liability remained on the appellant and the challenge failed.

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Issues: Whether the appellant could avoid excise duty liability by characterising the arrangement with the job worker as a principal-to-principal contract and whether any substantial question of law arose for interference.

Analysis: The arrangement between the appellant and the job worker showed that the appellant acted as principal and the job worker as agent, with raw materials supplied by the appellant and the manufactured goods returned after processing. The fact-finding recorded by the tribunal was held to suffer from no perversity, and no substantial question of law was found to arise.

Conclusion: The appellant remained liable for payment of excise duty, and the appeal was rejected.

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