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Issues: Whether the exemption under Notification No. 119/75-CE applied to the fabrication of capacitors and resistors from customer-supplied raw materials on job-work basis, and whether duty was payable on the full value of the finished goods including the value of the raw materials.
Analysis: The goods supplied by customers were subjected to processes that transformed polyester and polypropylene films, wires, cans, cores and other inputs into capacitors and resistors. The finished products were held to be different commercial articles from the materials received, with a new name, character and use. The fact that the work was done for job charges only did not control the levy once manufacture resulted in a new marketable article. Notification No. 119/75-CE did not protect such finished goods from duty where the manufactured articles had not already suffered duty.
Conclusion: The exemption was held inapplicable, and duty was payable on the entire value of the capacitors and resistors, including the value of the raw materials.
Final Conclusion: The appeal succeeded for the Revenue, the assessee's exemption claim failed, and the duty demand on the full assessable value was sustained.
Ratio Decidendi: Where customer-supplied inputs are transformed into a new and different marketable article having a distinct name, character or use, the activity amounts to manufacture and duty is chargeable on the finished goods' full value notwithstanding that the work is performed as job work.
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