TaxTMI 
TaxTMI 
2016 (1) TMI 517
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....shney Engineers & Erectors (in short VEE) through Minutes of Meeting dated 19-8-1996. As per the said contract, M/s. VEE was required for transportation, fabrication, erection of piping works start to finish till its final acceptance by the appellant and NTPC. On the work executed by M/s. VEE, no duty has been paid therefore proceedings were initiated against the appellant to pay the duty on the work executed by the M/s. VEE being a Labour Contractor of the appellant as the appellant is required to pay duty on the said work. In these set of facts, the proceedings were initiated against the appellant for demanding duty along with interest and imposition of penalty and penalty on M/s. VEE. The show cause notice was adjudicated which converted into the impugned demands. Aggrieved from the said order, the appellant is before us. 3. The learned Counsel for the appellant submits that the appellant had sub-contracted certain work to M/s. VEE under an agreement and as per the terms of the agreement, M/s. VEE is the fabricator of those piping and are liable to pay duty thereof being a job worker/manufacturer of such said goods, therefore, the appellant is not liable to pay duty. He ....
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.... be based on actual hours the machine is used by M/s. VEE. (7) Water and power for construction purposes as available from NTPC shall be supplied by RIL free of cost and further distribution whatever required shall be done by M/s. VEE. (8) Except for making payments against monthly work RA Bills. M/s. RIL will have no other liability to M/s. VEE on any account whatsoever. (10) M/s. VEE shall arrange for construction of their office/godown/establishment for their staff and workers for which suitable space as available from NTPC shall be provided by RIL. Similarly conveyance and other facilities will also be arranged by M/s. VEE for their operation at site on the assigned works. These all arrangements shall be made by M/s. VEE without any extra cost to M/s. RIL. (11) The unit rates as agreed by M/s. VEE are inclusive of loading, unloading, transportation, handling and cartage, etc., from NTPC/RIL stores, local site/shop handling, etc., and no extra payments shall be made on this account. It shall be M/s. VEE's responsibility for safe transit of entrusted materials to site and for safe custody and protection at project site again....
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.... from VEE bills for their portion of works done". 7. On going through the above, clauses of said Minutes of Meeting dated 19-8-1996, we find that nature of work executed by M/s. VEE is being a manufacturer/job worker of the appellant on principal to principal basis. In these circumstances, it cannot be said M/s. VEE is a labour contractor of the appellant and has fabricated the goods on behalf of the appellant. 8. A similar issue came up before this Tribunal in the case of AFL Pvt. Ltd. v. CCE, Mumbai-II reported in 2013 (295) E.L.T. 211 (Tri.-Mumbai), wherein this Tribunal has observed as under :- "7. Shri J. Pochkhanwala, Sr. Advocate appearing on behalf of the appellants submits that M/s. N.S. Guzder & Co. Pvt. Ltd. secured a contract for movement of Over Dimensional Cargo (ODC) from Kolkata to Jagdishpur via Mirzapur to fulfil a project of M/s. Indo Gult Fertilizers & Chemicals Ltd. ("Indo Gulf"). N.S. Guzder in turn assigned the work to the appellants. As per the contract with Indo Gulf, it is contemplated that the ODC may be moved inter alia by sea and therefore the tugs or barges which are required for the purpose should be adequately constructe....
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....by the appellants has no force in law inasmuch as no parties to a contract can contract themselves out of statutory provisions of law and any clause in an agreement contrary to law is not sustainable. 7.2 It is further contended that as per various statements recorded during the investigation, it is clear that the main raw materials (i.e. steel, tug engines, pipes, electrical material) were supplied by the appellant and M/s. Raigad supplied labour, tools, tackles, electrodes and electricity. It is also an admitted position that machines which were procured for manufacturing process are cutting machines run with the aid of power, welding machine run with the aid of power, electrical cables, grinders run with the aid of power and electrical generating sets for generating electricity. It is M/s. Raigad who used their own machinery for fabrication of the said goods by using generators, transformers, cables, welding machines, cutting machines. It was further submitted that the show cause notice clearly reflect the admission of M/s. Raigad that in terms of the said agreement they were paid on the basis of tonnage of manufacture. The appellants did not discharge any payment ....