JOB WORK under Notification 214/86

[SRIVATSAN RAJAN]

My client holds a "Manufacturer" registration under Central Excise for Adhesives and Sealants. They want to buy/ import steel coils and get them converted into steel tubes on job work basis. Can they avail the benefit of Notification 214/86 , even though they do not have the "manufacturer" registration for "steel tubes", since the Notification uses only the word "manufacturer"

[Alok Kumar]

Dear Sir,

As the notification nimber 214/86, c.e is applicable only for the excisable goods which are subject to levy of central excise duty , you  can avail this exemption notification when the new product / goods are covered under central excise/ or included in the central excise registration cerificate.

it is important to mention here that once a manufacturer pays duty on its exisiting excisable goods he cannot claim exemption on his new manufatured goods.

we should also examine wherher such activity amounts to manufacture or not before deciding the duty liability on the said new goods.

alok kumar

1.  If your clinet buying f steel coil  for converstion into steel tube they can not avail exemption under 214/86, because process on purchased good can not be treated  as job work. 

2. If  steel coil received on behalf of any other manufacurer  than  your clinet may availe exemption  under notification 214/86  in case duty to be paid by final manufactuer other wise your client may be treat as deemed manufacturer and they will  pay excise duty on steel tube just because process which may be undertaken is subject to manufacture.

 

R K Rajwanshi

 

[YAGAY and SUN]

In our opinion you should opt Rule 10B of the Valuation Rules.

AI Summary

Notification exemption: converting purchased steel coils into tubes may not qualify as job work; processing for another manufacturer may.
Entitlement to Notification 214/86 depends on whether the steel tubes are excisable and included in the holder's central excise registration, and on whether the conversion activity constitutes manufacture or true job work. Processing purchased inputs by the registrant itself generally risks classification as manufacture with the registrant treated as a deemed manufacturer and liability to excise; processing for another registered manufacturer may qualify for the notification if duty is payable by the final manufacturer. Consideration of valuation rules was also advised.