Job-work manufacture claim failed where evidence showed in-house control over processing, assembly and testing of acoustic enclosures.

Surrounding documentary and oral evidence established that the assessee controlled procurement, unloading, accounting, processing, assembly and testing of acoustic enclosures in its own premises, so the claim of manufacture by independent job workers failed. The connected chain of raw-material records, drawings and sketches issued by the assessee, employee statements, stock declarations to the bank, and low job-work conversion charges supported manufacture in the appellant's factory rather than direct supply by job workers. On those facts, duty liability attached to the actual manufacturer, and the demand, interest and penalty were sustained.

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Issues: Whether the acoustic enclosures were manufactured in the appellant's factory and cleared without payment of central excise duty, or whether they were manufactured by job workers and supplied directly to customers.

Analysis: The dispute turned on the effect of the evidence relating to procurement and unloading of raw materials, their accounting as stock in the appellant's premises, forwarding of materials for bending and corrugation, drawings and sketches issued by the appellant, testing and assembly activities in the factory, employee statements, stock declarations to the bank, and the low conversion charges shown in the job-work invoices. The evidence was treated as a connected chain pointing to manufacture in the appellant's premises and not to genuine manufacture by independent job workers. The appellant's denial of manufacture on job-work basis was found unsupported by material rebuttal, and the contention that the job worker alone was liable was not accepted on the facts proved.

Conclusion: The acoustic enclosures were held to have been manufactured and cleared from the appellant's factory without payment of duty, and the demand, interest, and penalty were sustained.

Ratio Decidendi: Where the surrounding documentary and oral evidence collectively establishes that the assessee controlled procurement, processing, assembly, and testing of goods in its own premises, the claim of manufacture by an independent job worker fails and duty liability follows on the actual manufacturer.

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