Indirect Tax - Final Student - Central Excise Concept Important Concept - Read carefully Q. When does the manufacturing activity get completed - either at the time of clearance of goods from the premises of the job-worker or at the time of their clearance from the premises of the manufacturer? Ans. CCEx., Pondicherry v. Sunco Rubbers Ltd. 2008 (228) ELT 27 (Mad.) The assessee, a job worker, received raw materials required for the manufacture of strips tyres from the primary manufacturers (viz. raw material suppliers) for further processing and after undertaking the processing returned them to the suppliers. Thereafter, the suppliers carried on the processes of deflashing, testing and inspection on those goods. The Department opined that since the goods processed at the premises of the job worker were fully manufactured goods, the job worker should pay excise duty on such goods before clearing them from its premises. High Court ruled that having regard to the activities like deflashing, testing, inspection etc. being undertaken by the primary manufacturers, it was evident that the goods were made ready for marketing only after the same were subjected to the above mentioned processes at the hands of the raw material suppliers. Hence, the manufacturing process was complete only after these processes were carried out at the premises of the suppliers. The job worker collected only job charges for the various processes undertaken by him on the goods. Moreover, as per section-2(f)(i), any activity which is incidental or ancillary to the manufacture of the final product would be considered as a manufacturing activity. Therefore, the goods cleared from the premises of the job worker, could not be regarded as fully manufactured goods, and as such, the activity undertaken by the assessee could not be regarded as a manufacturing process, as required under erstwhile rule 57F (2)/57F (3) of the Central Excise Rules, 1944 (now rule 16A of Central Excise Rules, 2002). Note – Rule 16A of Central Excise Rules, 2002 relating to removal of goods for job work, etc. reads as under-
Posted on: Wed, 23 Oct 2013 03:39:52 +0000
Trending Topics
Recently Viewed Topics
© 2015