Job Work of raw material and capital goods.

[Varun Arora]

Dear Experts,

Kindly resolve the query relating to job work.

If a manufacturer send the raw material to Job worker and receiving back the goods within 180 days and in this case whether Manufacturer needs to intimate the excise deptt. and if yes then what will be the format for this.

And if Mfrer is sending the capital goods then i think 57 f4 challan copy is there and in raw material also same format can be used please correct me if i am wrong.

In this case if job worker is manufacturing activity in this case and value of job work in this case is nominal say 10 lakhs then in this case whether Manufactrer can be held liable for paying excise duty.

[KASTURI SETHI]

Dear Varun Arora Ji,

Query-wise reply is as under:-

1. No. You are to follow the procedure laid down under Notification No.214/86-CE dated 25.3.1986 as amended read with Rule 4(6) of Cenvat Credit Rules, 2004. Since the manufacturer takes the responsibility of discharging Central Excise duty while filing intimation with the jurisdictional A.C./D.C.of the job worker with a copy to the A.C./D.C.( having jurisdiction over the manufacturer who sends the goods for job work), no intimation is required to be submitted again after receipt of the job-worked goods back. You are to make proper entries in the register prescribed for job work for proper accountal of the job-worked goods.

2. No.

3. In case the activity undertaken by the job worker amounts to manufacture (Except Liquor), the responsibility of discharging Central Excise duty is cast upon the principal manufacturer. However, the job-worker may also pay duty on the job-worked goods, in case the said goods are not to be sent back for any other process to the principal manufacturer. It is pertinent to add that primarily principal manufacturer is liable for discharging Central Excise duty. In case the activity undertaken by the job worker does not amount to manufacture, he will pay service tax after availing threshold exemption limit of Rs.ten lakhs.

 

 

 

AI Summary

Manufacturer liability for excise duty: primary responsibility with intimation to job worker jurisdiction; job worker may pay if goods not returned. Liability for excise duty on goods sent for job work is primarily that of the principal manufacturer, who must follow the prescribed job work procedure and file intimation with the jurisdictional officers of the job worker (with a copy to those over the manufacturer); no fresh intimation is needed on receipt. Maintain entries in the job work register. If the job worker's activity amounts to manufacture (except liquor), the principal remains primarily liable though the job worker may pay duty if goods are not returned; non manufacturing activity attracts service tax subject to threshold rules.