Job work exemption under excise law limits duty to processing charges, excluding customer-supplied material value.

Notification No. 119 of 1975 exempted goods manufactured as job work from excise duty beyond the amount charged for the work done, and its Explanation treated job work as processing customer-supplied articles and returning them after the intended manufacture. The duty base was therefore confined to the job work charges, not the value of materials supplied by the customer. The fact that the process resulted in a new article did not remove the benefit of the notification, because the exemption itself contemplated manufacture on job work terms while limiting assessable value to the processing charge.

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Issues: Whether goods manufactured in a factory as job work under Notification No. 119 of 1975 were liable to excise duty only on the job work charges or on the total value including the value of materials supplied by customers.

Analysis: Notification No. 119 of 1975, issued under Rule 8(1) of the Central Excise Rules, 1944, exempted goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944, when manufactured as job work, from duty in excess of the amount charged for the job work. The Explanation defined job work as a process where an article intended to undergo manufacture is supplied by the customer, processed by the job worker, and returned after the intended manufacturing process, with the job worker charging only for the work done. The decisive requirement was that the article supplied must undergo the intended manufacturing process and be returned to the supplier; the duty base was therefore confined to the job work charges and not the customer-supplied material value. The existence of a new article after manufacture did not defeat the exemption, because the notification itself contemplated such manufacture while limiting the assessable value.

Conclusion: The exemption applied, and excise duty was leviable only on the job work charges, not on the total value including the materials supplied by the customer.

Ratio Decidendi: Where a notification exempts job work manufacture and expressly limits duty to the amount charged for the job work, excise duty cannot be levied on the value of customer-supplied materials included in the processed goods.

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