Independent job worker classification determines excise valuation, and supplier's wholesale price cannot apply where the unit acts on its own account.

A manufacturing unit was treated as an independent job worker rather than hired labour of the raw material supplier because it operated on its own land, with its own finance, and bore its own profit and loss. The supplier's provision of know-how and technical assistance did not, by itself, make the unit employee-like or subject to the supplier's day-to-day control. On those facts, the applicable excise valuation basis was job-work valuation, not the supplier's wholesale sale price. The contrary finding that the unit was merely hired labour was rejected, and the demand, penalties, and valuation adopted by the adjudicating authority could not be sustained.

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Issues: Whether the unit engaged in manufacture was merely hired labour of the raw material supplier or an independent job worker and manufacturer, and consequently whether valuation had to be on the supplier's sale price or on the job-work basis.

Analysis: The arrangement showed that the manufacturing facility was set up by the unit on its own land and with its own finance, with profit and loss accruing to it. The supplier of raw material provided know-how and technical assistance, but that alone did not convert the unit into hired labour. The legal distinction drawn under the excise law is between a person who merely works under the control of another as an employee-like hired labour and a person who manufactures on his own account through an independent facility. On the facts, the unit functioned independently as a job worker, not under day-to-day supervision and control of the supplier. Once that position was accepted, valuation could not be based on the supplier's wholesale price; the job-work valuation principles were applicable.

Conclusion: The finding that the unit was hired labour was rejected, and it was held to be an independent manufacturer and job worker. The demand, penalties, and valuation adopted by the adjudicating authority could not stand on that basis.

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