TaxTMI 
TaxTMI 
2024 (1) TMI 720
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.... manufacturing the said products for M/s. Rocca Bathroom Pvt. Ltd. Chennai (commonly known as M/s. Parryware Roca Pvt. herein after referred to M/s. Roca). These parties had entered an agreement on 10.2.2012 and effective for a period of two years from 1.1.2012 to 31.12.2013. 3. It was found that M/s. Roca were supplying the major input namely urinal casing to the appellant on sale basis enabling fixing the electronic system in the urinal casing by the appellant. The appellant fixes the EFS system in the urinal casing in order to make it have an automated function. The urinal casing with this automated function is called electronic flushing system. These finished goods are packed as single unit per carton box and dispatched to various depots of Roca on sale basis as per the purchase order. The price for the said goods is arrived at by the appellant by cost constructing method with some profit margin. Such price is subjected to negotiation with Roca to arrive at the agreed price and duty is paid accordingly. All these activities are governed by the conditions laid down in the agreement made between Roca and the appellant. In March 2006, Parryware Division was hived off and a new co....
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....sel adverted to the definition of job work which reads as under:- "Job work means processing or working upon a material or semi-finished goods supplied to the job worker so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for aforesaid process and the expression "job worker" shall be construed accordingly," 6.1 The lower authorities have failed to see that no items was owned by M/s. Roca Bathroom Products Ltd (called RBPPL) which was supplied by M/s. RBPPL on sale and this item was not supplied free of cost to the appellants. This factual position is not disputed in the impugned order. Hence, the manufacture of goods by the appellants was only on the materials owned by themselves. 6.2 At para 9 of the impugned order-in-appeal, the Commissioner takes objection in purchasing this item 'urinal castings' from M/s. RBPPL themselves and not from any other person but he has not given a finding as to under which provision there is a prohibition for purchasing, an input from the buyer himself. So long as M/s. RBPPL had sold such goods and paid sales tax on the same it cannot be said the final produc....
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.... held that even if the goods are produced with customers brand name and under his quality control it does not mean that customer is manufacturer. The quality testing and control by the customer, affixing of his brand and monitoring of activity cannot render the customer as manufacturer. 6.8 The Ld. Counsel submitted that the issue stands squarely covered the decisions rendered in the appellant's own case as reported in [2020 (3) TMI 308-CESTAT-CHENNAI]. The Ld. counsel prayed that the appeal may be allowed. 7. The Ld. Authorised Representative Shri N. Satyanarayanan appeared for the Department and reiterated the findings in the impugned order. 8. Heard both sides. 9. The issue that arises for consideration is whether the appellant M/s. Inova India is a job worker of M/s. Roca or whether the transaction between the above two is on principal to principal basis. To understand the issue, the relevant part of the Agreement is reproduced as under:- 4. BASIS 4.1 It is specifically agreed and understood by and between the Parties that the sale of the said products by INOVA to RBPPL is on the basis of principal to principal and INOVA is fully responsible for manufacture, sale and su....
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....with some profit margin. This cost construction price was subjected to negotiation with M/s. Roca to arrive at the agreed price, on which the duty was paid. All these activities were governed by the conditions laid down in the agreement entered between M/s. Inova and M/s. Roca (previously known as Parryware Division - M/s. EID Parry (India) Ltd) In March 2006, the Parryware Division was hived off and a new company known as M/s. Parryware Glamourooms Pvt. Ltd, was formed. After entering into a joint venture with M/s. Roca, Spain, the name of the company M/s. Parryware Glamourooms Pvt. Ltd was changed to M/s. Parryware Roca Pvt. Ltd and thereafter, to M/s Roca Bathroom Products Pvt. Ltd. The agreement made in 2001 was renewed every year and extended till December 2009 as per the letter dated 15.06. 2009 of the appellant M/s. Roca. 2.3 From the terms of the agreement, the Department was of the view that the transactions between M/s. Inova and M/s. Roca were not on principal to principal basis. From investigations the Department was of the view that M/s. Inova were manufacturing as job worker for M/s. Roca on contract basis. The price adopted by M/s Inova was only the cost of product....
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.....f. 1-4-2007. As per this rule, the value at which principal manufacturer sells his goods will be the basis for determining the transaction value for payment of Central Excise duty by the job worker. For the purpose of this rule, the job worker is defined as a person engaged in the manufacturer or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or any other person authorized by him Thus to qualify as job worker, in our view, the following hard sticks require to be satisfied (i) Job worker should be engaged in manufacture or production of goods on behalf of another manufacturer. (ii) Inputs or goods should be supplied by the said principal manufacturer or by any other person authorized by him. (iii) By implication, the inputs or goods so supplied will not be required to be paid for by the job worker. When we apply these tests to the facts of the appeal at hand, we find that Sujhan does not appear to quality to be a job worker" for the purpose of Rule 10A ibid. The inputs or goods are not supplied free by Honeywell, or other persons authorized by Honeywell. 8.4 On the other hand, Sujhan have to ....