Job work under Rule 57S(8) includes suppliers using their own raw materials, allowing mould clearance without credit reversal.

Rule 57S(8) of the Central Excise Rules, 1944 permitted removal of moulds and dies to a job worker without payment of duty where goods were produced on the manufacturer's behalf and to his designs and specifications. A supplier did not cease to be a job worker merely because he used his own raw materials, so long as the work was undertaken under the manufacturer's specifications. On that basis, clearance of moulds without reversing Modvat credit was held permissible, and the assessee's position was accepted.

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Issues: Whether moulds could be cleared without reversing Modvat credit when the parts were manufactured by suppliers using their own raw-materials, but according to the appellant's designs and specifications, so as to fall within Rule 57S(8) of the Central Excise Rules, 1944.

Analysis: The arrangement showed that manufacture of the washing machine parts had been assigned to the suppliers on job work basis. The use of their own raw-materials did not take the suppliers outside the category of job workers for the purpose of Rule 57S(8). That provision, beginning with a non obstante clause, specifically permitted removal of moulds and dyes without payment of duty to a job worker for production of goods on behalf of the manufacturer and according to his specifications. The earlier decisions relied upon supported the view that supply of raw-materials by the manufacturer was not a necessary condition for treating the recipient as a job worker under this rule.

Conclusion: The clearance of moulds without reversing the Modvat credit was permissible and the issue was decided in favour of the assessee.

Ratio Decidendi: For the purpose of Rule 57S(8) of the Central Excise Rules, 1944, a person manufacturing goods to the manufacturer's designs and specifications is a job worker even if he uses his own raw-materials, and moulds may be removed to such job worker without reversal of credit.

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