TaxTMI 
TaxTMI 
2013 (2) TMI 667
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....e manufacturers of Viscose Filament Yarn (VFY). VFY manufactured by them is in cake form and they are sent to the job worker M/s. Shrishti Textiles on payment of duty on the value determined under Rule 8 of the Central Excise Valuation Rules, 2000. The job worker converts the yarn in cake form into cone form and clears the same to the appellant's depot. The job worker avails the benefit of Notification No. 30/2004-C.E., dated 9-7-2004 on the activity carried out by him and accordingly has not discharged any duty liability. The case of the department is that the activity undertaken by the job worker does not amount to "manufacture" and therefore, the benefit of the aforesaid Notification is not available. The appellant clears the goods from ....
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.... change in form of the yarn from cake form into cone form at the job worker's factory. However, the yarn remains yarn and therefore, no new product has emerged and "manufacture" could not be said to have taken place. He also refers to Chapter Note 3 to Chapter 54 in support of his above argument. 5. As regards the benefit of exemption Notification No. 30/2004-C.E. claimed by the job worker, the said benefit would not be available because the job worker in this case is only a dummy of the appellant manufacturer inasmuch as the raw materials/consumables required for the conversion including packing materials have been supplied by the appellant and even the capital goods required for undertaking the process have also been supplied by the....
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.... processes specified converts the yarn from one form to another but nevertheless the product remains yarn only. All these processes are undertaken to make the yarn suitable for weaving of fabrics. The VFY in cake form is not suitable for weaving. Therefore, it has to be converted into cone form before it can be used for weaving. The process of conversion of yarn from cake form to cone form is similar to the processes specified in Note 3 to Chapter 54 and therefore, the said activity would amount to 'manufacture' in our view. 9. The Hon'ble Apex Court in CCE, Bombay v. Maharashtra Fur Fabrics Ltd. reported in 2002 (145) E.L.T. 287 (S.C.) considered a similar issue in the case of sliver pile fabrics falling under Heading 5801 or 60.01 o....
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....dent of the ownership of the goods. Therefore, the value of goods produced on job work basis for assessment under Section 4 of the Excise Act will not be the processing charge alone but intrinsic value of processed fabrics which is the price at which the fabrics are sold for the first time in the wholesale market." 12. Similarly, in the case of Cosme Remedies Ltd. v. CCE, Goa reported in 2006 (203) E.L.T. 567, this Tribunal held that in a case where there was an agreement between loan licensee and job worker that supervision and control will be that of job worker only and in every job work, manufacture has to be carried out as per price indicated by raw material supplier and as per the specifications laid down by raw material supplier....