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Contract manufacturing

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Querist : Anonymous

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Querist : Anonymous (Querist)
03 October 2012 Dear experts,
If any person forwards order as well as raw material other than principal raw material for some processing activity then whether this will amount to contract manufacturing?
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U S Sharma

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U S Sharma (Expert)
03 October 2012 under excise there is no word like contract manufacturing, it would be either job work ( if rules and records maintained as per law) or the job worker would be deemed manufacturer, without any direct connection with the principal raw materials list.

if job work is done, then principal who sends the materials and receive after job work is liable to discharge the duty liability,

if the job work procedure is not maintained, then job worker is deemed manufacturer, and he is liable to pay duty on clearance value ( including the materials sent by principal)
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