Seizure of Principal Manufacturer's Stock Lying at Job Worker's Premises

[Vivek Gupta]

The Principal Manufacturer (PM) is not registered under the excise laws and its Job Worker agrees to discharge all the related excise liabilities under Notification No 36/2001.

The PM retains the right and title of the stocks both raw materials and finished goods lying at the Job Worker's premises.

However the excise liability on the stock is being discharged by the Job Worker.

If the job worker fails to discharge the excise liability due against the stocks of the PM, then can the Excise Dept seize the stock of the PM lying at the job worker's premises.

[KASTURI SETHI]

CE dutiability arises at the time of removal of ecisable goods from the factory. In the situation explained by you if the job worker (who is responsible for discharging duty liability) removes the goods in contravention of CE law goods can be seized from the job worker's premises. Goods are not to be removed without proper invoice whether premises belong to job worker or principal manufacturer. However, registration is mandatory for principal manufacturer except for small scale units. They are to follow the procedure laid down in notification nos. 83 & 84/94.

[KASTURI SETHI]

Goods lying in the factory can also be seized but such seizure is not successful because duty is to be discharged at the time of removal from the factory.

[Vivek Gupta]

The job worker is not required to pay duty on every clearance. Removal of goods is done on a daily basis on a proper invoice. But excise duty for that month is paid only once, by 6th of the next month before filing of the return. Hence the job worker can very easily clear goods for the entire month without paying any duty.

[KASTURI SETHI]

Who is to pay CE duty---will write the words "duty payable" on the invoice and also calculate the same. Thus he owns the responsibility to pay duty by due date. Hence it is not without payment of duty. Duty is deferred till the due date fixed.