1997 (7) TMI 148 - SC - Central Excise

Supreme Court clarifies 'job work' exemption for newspaper printing under Notification No. 119/75-C.E.

The Supreme Court held that the appellants printing a Marathi daily newspaper under an agreement with the owners qualified for exemption under ... Whether the appellants were not entitled to exemption of Notification No. 119/75-C.E., dated April 30, 1975 since they did not fulfil the conditions of investment and turnover ingrained therein? Held that:- In view of the decision of this Court in Prestige Engineering (India) Ltd. (1994 (9) TMI 66 - SUPREME COURT OF INDIA) and having regard to the findings that have been recorded by the Assistant Collector in the present case that the appellants were getting the newsprint from Tarun Bharat and the editing was also being by Tarun Bharat and only printing job was to be done by the appellants in the press, it must be held that the job-work which was being done by the appellants fell within the ambit of Notification No. 119/75-C.E., dated April 30, 1975 and the appellants were entitled to the benefit of the said Notification. The appeal is, therefore, allowed, the impugned judgment of the Tribunal is set aside and the judgment of the Collector of Central Excise (Appeals) is restored. Issues:1. Entitlement to exemption under Notification No. 119/75-C.E., dated April 30, 1975 for excise duty refund based on job-work basis.2. Interpretation of the term 'job work' under the notification.3. Application of the judgment in Prestige Engineering (India) Ltd. v. Collector of Central Excise, Meerut & Ors., 1994 (73) E.L.T. 497 (S.C.) = (1994) 6 SCC 465 to determine eligibility for exemption.Analysis:1. The appellants were printing a Marathi daily newspaper under an agreement with the owners, receiving manuscript and newsprint from the owner for printing and returning the printed matter. The Assistant Collector initially found the appellants eligible for exemption under the Notification but denied it due to not fulfilling investment and turnover conditions. The Collector of Central Excise (Appeals) reversed this decision, allowing the refund if admissible. The Customs, Excise and Gold (Control) Appellate Tribunal later held the appellants ineligible for the exemption, citing the essential identity of the article after the manufacturing process. The Supreme Court referred to the judgment in Prestige Engineering (India) Ltd. and concluded that the appellants fell within the ambit of the Notification, entitling them to the benefit.2. The Tribunal's interpretation of the term 'job work' under the Notification was crucial. The Court disagreed with the restricted view that 'manufacture' was limited to processes incidental to the completion of the product. The Court emphasized the concept of 'job work' and its intent to assist small manufacturers engaged in job works. The Court clarified that the notification aimed to benefit job workers contributing mainly labor and skill, not those who supplied their own material and produced different goods. The Court highlighted that minor additions by job workers did not change the nature of their work.3. Referring to the judgment in Prestige Engineering (India) Ltd., the Court considered the Assistant Collector's findings that the appellants received newsprint and editing services from the owner, with only printing done by the appellants. Based on this, the Court held that the appellants' job-work fell within the scope of the Notification, entitling them to the benefit. Consequently, the Tribunal's decision was set aside, and the Collector of Central Excise (Appeals) judgment was restored, allowing the refund. No costs were awarded in this matter.