TaxTMI 
TaxTMI 
2009 (5) TMI 426
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...., are registered manufacturer of excisable goods i.e. motor vehicles and they are engaged in fabricating and mounting the bodies of buses and trucks on the chassis manufactured by M/s. Eicher Motors Limited as well as M/s. Tata Motors Limited. The said body building activity is being carried out by the said firms on the automobile chassis supplied free of cost by the manufacturers namely M/s. Eicher Motors Limited and M/s. Tata Motors Limited and for the purpose of body building activity, the raw materials are also procured by the said firms from the vendors identified by the manufacturers of automobile chassis. The manufacturers of automobile chassis had been discharging duty liability on the value arrived at in accordance with the provisions of Section 4(1)(a) of Central Excise Act, 1944 hereinafter called as "the said Act" as revealed from the invoices and challans issued by them but do not charge sales tax at a time the chassis are delivered to the said firms. The said firms avail Cenvat credit in relation to the duty paid on the chassis by the automobile chassis manufacturers and undertake the fabrication and mounting activity. The said firms pay the duty as per the provisions....
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....uch goods on completion of the product to the manufacturer of chassis, the activity cannot be termed as one done on job work basis. He further submitted that the Apex Court has stressed the requirement involvement of labour and skill as the main ingredients for the application of the concept of job work though it could be done with the help of machine. Considering the same and taking note of the activity in relation to fabrication and mounting of body building activity which is being carried out by the said firms on the automobile chassis supplied free of cost by the manufacturer of chassis and subsequent sale of such vehicles, there is no scope for classifying the activity of the said firms in that connection to be on job work basis. Attention was also drawn to the copy of the invoice placed on record in relation to the sale of the product of the said firms to the manufacturer of chassis. He further submitted that the activity of fabrication and mounting of body on the chassis involves utilization of significant number of inputs and, therefore, it cannot be termed as mere working on the chassis supplied by the manufacturer to the said firms involving mere labour and skill. 8. He ....
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....n clearly described that the commodity sold is a passenger motor vehicle. In that regard the attention was drawn to the description column in the invoice issued by the said firms. Considering the same according to the learned DR the provisions of Rule 6 would not be attracted, as the sale in that regard cannot be considered as that of the vehicle as such but it is only an activity of the body mounting upon chassis. Further referring to the definition of the term "sale" under Section 2(h) of the said Act, he submitted that the transaction in relation to the product manufactured by said firms does not include sale of the chassis as they were supplied to them free of costs by the manufacturer of chassis and the same are returned to manufacturer along with sale of the body mounted on the chassis but not as a vehicle as such. Attention was also drawn to Chapter 87 and Head Note 5 thereof. He states that for the purpose of said chapter, a body fabrication or mounting on chassis would fall under Heading 8706 and shall amount to manufacture of a motor vehicle. In that regard reliance was sought to be placed in the decision of the Tribunal in CCE, Ghaziabad v. T.P.S. Mfg. & Construction Co.....
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.... same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of the said goods from the factory of job worker; (iii) (i) or (ii), provided if any excisable goods - Explanation. - For the purpose of this rule, job worker means a person engaged in the manufacture or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him. 12. Plain reading of Rule 10A would reveal that apart from providing the method of valuation for the purpose of deciding excise duty liability in respect of the goods manufactured by the job workers, the provision clearly defines the meaning of the term job worker for the purpose of the said rule. It clearly states that a job worker means a person engaged in the manufacture or production of goods, on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him. Obviously, therefore, whenever any person is engaged by the principal manufacturer for completion of process of manufacture of any particular product and su....
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....cturers undertaking job works. The idea behind the Notification was to help the job workers - persons who contributed mainly their labour and skill, though done with the help of tools, gadgets or machinery, as the case may be. The Notification was not intended to benefit those who contributed their own material to the articles supplied by the customer and manufactured different goods". 15. Obviously, the Apex Court was dealing with the meaning of the expression 'job work' in the context in which the said expression was used in the Notification No. 119/75-C.E. It is true that the Apex Court has held that for the purpose of deciding whether it is a job work or not, the explanation clause to the notification was not sufficient and therefore the Apex Court has considered the several meanings of the said expression as found in the Concise Oxford Dictionary. However, at the same time, the Apex Court has clearly observed that the Concise Oxford Dictionary gives several meanings to the said expression, and out of those several meanings, the one which is relevant in the context in which the said term is found to have been used in the said notification, is required to be taken and therefore....
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....e called as 'provision of service on behalf of the client. It was in a case of taxable activity falling within the category of 'business auxiliary service' while the 'client' is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides such service to the 3r person, on behalf of the client: i.e. "acting as an agent of the client". With this observation it was opined that it would not fall under business auxiliary service or any other existing taxable services. 18. Apparently, the Board's opinion was in relation to the service tax matter. It was in relation to the activity which was in question and to ascertain whether it would fall under the category of 'business auxiliary service' or not. In that regard, the expression 'provision of service on behalf of the client' and more particularly the term, "on behalf of" was sought to be explained by the Board. The explanation in relation to such expression used in a provision in a particular taxing statute cannot be straightway applied to understand the meaning of the similar expression used in a different statute, more particularly ignoring the context in which it is u....
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....ty of the motor vehicle. The purchase order to which our attention was drawn, also refers to the expression sub-contracting. With reference to the same it was sought to be contended that there was a contract between the manufacturer of chassis and the said firms in relation to the manufacture of body building for the purpose of fabricating and mounting on the chassis manufactured by the chassis manufacturer. However, no copy of any such agreement has been placed on record nor it appears to have been made available to the Commissioner before passing the impugned order. The purchase order also refers to terms and conditions but it states that the same are printed overleaf. However, the copies of the purchase order placed on record do not disclose any of the terms and conditions having been printed on those purchase orders either on the front page or overleaf. Though we need not draw adverse inference for failure on the part of the appellants in this regard, yet it is not possible to ignore the same totally while dealing with the matter, as the issue involved clearly required the appellants to establish therein contention that they are the sub-contractors as claimed by them. If the do....