‘Job Workers’ are Manufacturer who does not have an Obligation to Discharge Excise Duty Liability under Central Excise Act: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that ‘job-worker’ was nothing but a manufacturer who did not have an obligation to discharge excise duty liability under Central Excise Act, 1944. 

Patel Profiles Pvt Ltd, the appellant assessee was a job worker, and Siemens Ltd and Jindal Steel Works Ltd for turnkey execution of a ‘steel rolling mill’ by the former at the facility of the latter and involving two manufacturers of parts/components, Patel Profiles Pvt Ltd and Excel Tech Engineers Pvt Ltd, who participated peripherally in the project by arranging for the sale of equipment produced by them by deploying goods supplied ‘free of cost’ by the project executor that was then delivered at the site of Jindal Steel Works Ltd under cover of invoices evidencing payment of appropriate duties of central excise. 

The assessee appealed against the order passed by the Commissioner of Central Excise (Appeals) for confirming the excise duty demand and imposition of penalty against the assessee. 

Rajesh Ostwal, the counsel for the assessee contended that taxation of produce of ‘job-worker’ was also not impeded for several years after the rules for valuation was notified and the save for certain specific purpose, such as determination of ‘duty liability’ or entitlement to ‘exemption’, ‘job-worker’ had no legal existence in central excise law other than as a manufacturer. 

Also submitted that job-worker was nothing but an ancillary manufacturer and the demand raised against the assessee was not as per law and liable to be deleted. 

Xavier R Mascarenhas, the counsel for the department relied on the decisions made by the lower authorities and contended that job workers are obliged to discharge liability devolving on manufacturers. 

The Bench observed that a ‘job-worker’ was nothing but a manufacturer who did not have an obligation under Central Excise Act by special treatment and was nothing but a manufacturer.  The two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) quashed the excise duty demand and imposition of penalty against the assessee.

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