job work done by jobworker neither chargeable to excise duty where it does not amount to manufacture and not liable for service tax where the goods cleared from jobworkers premises are sent to manufacturer who clears the goods after payment of excise duty thus jobworker is neither cahrgeable to excise duty nor service tax is this understanding correct viewers/ experts pls enlighten on the above
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Referring the facts given in the query, yes, job worker is neither liable to excise duty nor liable to service tax on the activity. See, under central excise, where the activity of a job worker is amounting to manufacture, the same is eligible for exemption under Notification 214/86 or 83/94 read with 84/94. Moreover, in both the cases, where job worker pays the duties of excise or service tax, the same is eligible for cenvat credit in the hands of main manufacturer and therefore, a revenue neutral exercise.
I agree with Shri Mukesh Kumar according to the Excise Notifn. No. 214/86 provide the facility to manufacturer for removal wihout payment of duty and service tax Notifn No. 08/2005 dt. 01.03.05 exempt only "amount to manufacture" and Notifn. No. 21/2005 dt. 07.06.05 exempts to the jobworker from service tax "production & processing" of diamond, gold & jewellery. If your jobworker process on above material on behalf of you it will not be lible to service tax, but in other case the processing on goods on behalf of clint is lible to service tax and manufacturer can take credit of service tax paid to the jobworker as input service.