26 October 2012
the definition of jobwork says that goods are given to the jobworker for process or manufacturing by the PRINCIPAL MANUFACTURER. the princiapl manufacturer then sell the goods to the buy. the principal manufacturer may be excisable or non excisable.
however in this case, the goods are given for manufacturing to the jobworker by the end user himself. the end user being a businessman who requires pressure vessels in his factory. he purchases the material and sends it to the jobworker.
what will be the exicse implication in such a scenario
26 October 2012
Excise duty will be applicable if production of goods or process amounts to manufacture. The principle manufacturer is under SSI exemption then excise duty will not be applicable. If the process does not amounts to manufacture or production of goods then jobworker will liable to pay service tax.
27 October 2012
the person in question is not the principal manufacturere. he is the user of the product. he is the end user. instead of getting the pressure vessel from the principal manufacturer, he gets it directly made from the jobworker after buying the rawmaterial.
10 November 2012
if the goods are sent under cover of 214/86 or CCR rule 5(4) then duty liability remains with principal, otherwise if the job worker declare or in other words put on challan that he received the raw materials and sent back the pressure vessel then job worker is deemed manufacturer, and if duty is payable by job worker , he will charge it to the principal.
CAclubindia
