2023 (5) TMI 518 - AT - Central Excise

Liability of Central Excise Duty - appellants were job workers of M/s Nilkamal Limited - requirement of appellant to pay duty on the sales price of M/s Nilkamal Limited at their depots - HELD THAT:- There is nothing in the contract to show that the appellants have manufactured the goods “on behalf” of M/s Nilkamal Limited despite the facts that the entire manufactured goods were sold to M/s Nilkamal Limited. Moreover, the goods are not manufactured from any inputs or goods supplied by the principal manufacturer i.e. M/s Nilkamal Limited.

The appellants might have used the raw material as per the specifications supplied by M/s Nilkamal Limited. This fact alone will not satisfy the contention that the inputs for the manufacturing of the goods are supplied by the principal manufacturer. The crux of the definition of job worker is in the use of inputs supplied by the principal manufacturer. It is a common understanding that a job worker is the one who works upon the goods supplied directly or indirectly by the principal manufacturer. This fact is totally missing in this case; neither from the terms of contract nor from the show cause notices, it is inferred that the goods are supplied by M/s Nilkamal Limited; therefore, the appellants do not fit into the definition of ‘job worker’ even for the purpose of Rule 10A.

The Commissioner of CGST & CE, Nagpur-I vide order dated 31.10.2018 has dropped substantial amounts of demand on this issue.

Appeal allowed.