TMI Blog1987 (3) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... , aluminium cans, polypropylene containers, can covers and bushings and PCMT short (tags). For resistors they receive ceramic core, tinned copper wire, metal cap, lacquer. M/s. Asian Electronics claim that they did only job work on the raw materials supplied to them by their customers for manufacturing capacitors and resistors which they then return to the owners, charging them only for job work. The Central Excise, however, charged duty on the total value of the capacitors and resistors, i.e. the value of the raw materials and the cost of fabrication/manufacture etc. This, say the manufacturers, was illegal, because under Notification No. 119/75-CE., they were entitled to exemption from paying any duty above the cost of the job work. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification was important and that it showed that the article itself which should undergo some manufacturing process must be returned to the supplier. The company said that various High Courts have held that the said Notification No. 119/75-CE., is available to the job worker who merely charges job charges for the work done by him, even if a new article emerges as a result of manufacturing process to which the job workers subject the article or the raw materials. They quoted in support 1978 E.L.T. J-533, 1980 E.L.T. 52, 1982 E.L.T. 129 and 1980 E.L.T. 587. They say also in their cross-objection that the department submitted in their appeal that as the factory received components and that out of these components, they manufactured capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and resistors from them. In making capacitors, they wind polyester/polypropylene films supplied by its customers, and the ends of the wound coils are sprayed, and the terminals are welded. The wound coils are encapsulated in polypropylene tubes or aluminium containers also supplied by the customers. The containers, cases, tubes, are filled with resin of other fillers, according to requirements. They are then tested and packed to conform to relevant ISI specifications. The capacitors are then packed in standard packings and are ready for dispatch. Winding of the paper at the aluminium foils is done on automatic winding machines. The end terminals are taken out by inserting foil terminals at the stage of winding. The wound coils are encased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olyester film. Similarly, with the tissue paper, the copper wire etc., which have been cut to fit into the capacitor or resister, etc., according to the needs of the fabrication. It may be true that the film can be seen in the coil and that the can be seen as the outside encasement of the capacitor and that the wires, though cut, can still be identified as copper/aluminium wires; but this is not return of the same material. When a polyester film is returned, it must be returned as a film, and not as a part of a capacitor or rather several capacitors; when copper wire is returned, it must be returned as a copper wire and not as pieces of wire, cut and inserted as parts of a number of capacitors. The lacquer, to be sure, can be seen as a coat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back to the literal interpretation, the return of the polypropylene film, the copper wire, the aluminium foils, the cans, the tissue paper etc. will not bring the manufacturers goods the benefit they seek for them, because that return will not be a return under Notification No. 119/75-CE. 13. What M/s. Asian Electronics overlook is that the materials they received from their customers were used by them to fabricate and manufacture the capacitors and resistors. Capacitors and resistors are totally different articles from the materials which went into their production. It is true that they had done only job work, because none of the materials belong to them and their contribution is only to fabricate and manufacture the capacitors and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. are transformed into capacitors or resistors. The uses to which the capacitors and the resistors are put are totally and completely different from the uses of the materials that went into their manufacture. The names change; they acquire a new character of electrical components; and find a totally new use. All the three standards, not just one, are fulfilled; and new and different articles have emerged. 16. Therefore, if from the materials they received from their customers, M/s. Asian Electronics manipulated and fabricated them to produce capacitors and resistors, articles which are totally new and different from the materials they received and which come into existence only upon their manipulation and manufacture, then the only co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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