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case study

This query is : Resolved 

Plese study the following case and guide me about proper treatment:

There are two sister concern,say A and B.Both deals in chemicals.But the manufacturing and sale of B is very less.now Company A supply certain raw material to company b for certain job work and then received back the final manufactured product.For that purpose Company A provides certain job work charges to company b after deducting TDS.
Now company A claim that it is not liable to pay the exice duty because it has not manufacturer but the actual manufacturer is Company B.So Company B is liable to Pay the Duty. But Total sales of company B does not exceed then Rs 15000000/-. So there is no any liability of Co B to pay the Duty.
Now I want to ask that Whowill be deemed as a manufacturer whether Company A or B and who will be liable for duty.

Thank You

Ankit Kansal

The process undertaken by B amounts to manufacture- then excise duty is to be paid. It has to be paid by the company, who manufactures the goods. Ownership of goods are not relevant. Thus B is liable.
However, B is entitled to claim SSI exmeption if it is permissible. If the total value of manufactured goods (including value of goods manufactured on job work) does not exceed 1.5 crores, there is no liability.

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