TaxTMI 
TaxTMI 
2019 (8) TMI 1363
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.... wrongly availing the SSI exemption alleging that the value of clearances made by appellant from its own factory as well as from the factories of the job worker are liable to be clubbed in terms of the aforesaid Notification No. 08/2003-CE dated 01.03.2003. Based thereupon the show cause notice No. 580 dated 25.04.2012 was served upon the appellant proposing the recovery of Central Excise duty amounting to Rs. 92,02,177Cr. alongwith the interest at the appropriate rate and the proportionate penalty. The said proposal was confirmed vide the Order-in-Original No. UDZ-EXCUS-000-COM-0001-18-19 dated 18.04.2018 as was passed by Commissioner, Central Excise Commissionerate, Jaipur-II. An Appeal was preferred before this Tribunal by the appellant, being aggrieved of the said order. This Tribunal vide Final Order No. 52873/2017 dated 28.03.2017 had remanded the matter to the adjudicating authority to decide the issue denovo after providing opportunity of hearing to the assessee and after allowing the evidence, if any, to be admitted, so as for verifying as to whether the relationship between the appellant and the job worker was on principal to principal basis or not. In furtherance of the ....
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....bility to pay the duty and his manufacturing activity cannot be clubbed. The decisions of Hon'ble High Court of Gujarat in the case M/s. Prolite Engineering Co. Vs. Union of India reported at 1995 (75) E.L.T. 257 (Guj.) and M/s. Supreme Tank Pvt. Ltd. Vs. CCE reported at 2014 (314) E.LT. 725 (Tri.- Ahmd.) and the Circular No. 56/56/94-CX dated 14.09.1994 are also relied upon to corroborate the same. It is further submitted that ownership of raw material is not relevant for ascertaining as to who is the manufacturer. The decision of Hon'ble Apex Court in the case M/s. Ujagar Prints Vs. Union of India reported at 1988 (38) E.L.T. 535 (S.C.) has been relied upon. With these submissions, denial of SSI exemption benefit to the appellant has been alleged to be contrary to the definition of manufacture and also to the Notification No. 08/2003. The Order confirming the same is, therefore, prayed to be set aside. Appeal is prayed to be allowed. 4. While rebutting these arguments it is submitted on behalf of the Department that the adjudicating authority below has observed that there is no contract available which specifies the work or activities to be carried out by the job worker. On the ....
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....t on the goos to render the product marketable to the consumer and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable, goods, but also any person who engages in their production or manufacture on his own account;" 5.4 The Hon'ble Apex Court in the case of Union of India Vs. Delhi Cloth and General Mills reported at 1977 (1) E.L.T. 199 (S.C.) has held that the word 'manufacture' used as a verb is generally understood to mean as brining into existence a new substance and does not mean merely to produce mere change in the substance however, minor in consequence the change may be. Subsequently, while deciding a case titled as Deputy Commissioner of Sales Tax Vs. Pio Food Packers reported at 1980 (6) E.L.T. 343 (S.C.) the Hon'ble Apex Court has held: " ..... manufacture is the end result of one or more processes through which the original commodity is made to pass .... Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that in one commodity has been consumed in the manufacture of another. Al....
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....scertained with reference to facts such as whether the job worker has received any financial assistance from the supplier of the raw material, whether the supplier of the raw material exercises any control over the management of the affairs of the job worker and whether the job worker is an independent entity and not merely a dummy or an agent of the raw material supplier. If it is found that the job worker is an independent entity and carries out the manufacturing activities independently and is not an agent, of the raw material supplier or a dummy, then the job worker will be treated to be a manufacturer." 6.1 Hon'ble Supreme Court in M/s. Ujagar Prints (supra) has held that duties of excise are imposed on the production or manufacture of goods and are levied upon the manufacturer or the producer in respect of the duty taxed. It was clarified that the question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability. The essential and conceptual nature of the tax is to be kept clearly distinct from both the extent of the power to impose and the stage at which the tax is imposed. Though the levy is on production or manufac....
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....ty of the job worker. It has already been observed about the settled law that the ownership of goods and providing of raw material are not the mere criteria to decide the duty liability. It has also been observed that the job worker is independently manufacturing the final product in its own premises without any help of either labour or machine from the principal manufacturer/ the appellant herein, the activity of job worker is not simply of processing but is that of manufacture. As such it is the job worker, in the present case, who was liable to pay the duty. 9. The adjudicating authority below has failed to follow the directions. Irrespective, there is no contract between the appellant and its job worker but the facts and circumstances as discussed above are sufficient to hold that the job work was performing an activity of manufacture and the raw material was provided by the appellant on principal to principal basis. The findings of the original adjudicating authority about no material to establish a relationship are, therefore, apparently wrong. The adjudicating authority has also committed an error while ignoring the above cited decisions of Hon'ble Apex Court. The findings....