2024-VIL-1072-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Job-work, Manufacturer – Appellant is a manufacturer of Populated Printed Circuit Boards (PPCB) classifiable under Chapter Heading 8517 7010 of Central Excise Tariff Act (CETA), 1985 - appellant undertook the process of stuffing and soldering of components on the Printer Circuit Boards (PCB) supplied by the customers amounting to manufacture under Section 2(f) of the Central Excise Act, 1944. However, the appellant claimed that they were only job-workers and the duty liability is on the suppliers of raw materials - Whether the processes undertaken by the appellant on job work basis amounted to manufacture under Section 2(f) of the CEA, 1944 and whether the duty liability is on the appellant who is a job-worker or the suppliers of raw materials – HELD - The process of populating the PCBs by the appellant as a job worker amounts to manufacture. As long as there is transformation of a product into a new product marketable and commercially known, manufacture takes place. In the instant case, the plain PCBs are identified differently in the commercial/market parlance when compared to PPCBs, which is a transformation from one commodity to another and amounts to manufacture under Section 2(f) of CEA, 1944 - The duty liability is on the appellant who is the job-worker and not on the suppliers of raw materials. The conditions laid down in the relevant Notifications, i.e. Notification No. 214/86-CE and Notification No. 83/1994-CE, are substantive in nature and non-compliance of which cannot be construed as merely procedural. The plea taken by the appellant that if the Principal Manufacturer has not authorized the appellant, then the liability will be on the Principal Manufacturer is not tenable as the clearances were made on principal-to-principal basis - The extended period of limitation under proviso to Section 11A cannot be invoked as the department was aware of the appellant clearing the job work goods without payment of duty in 2009 itself. Therefore, the demand can only be sustained for the normal period for the show-cause notice dated 07.03.2013 - The appeals are remanded for re-quantification of demand based on the observation that the appellant has produced documents to show that the suppliers have either cleared the goods under various exemptions or on payment of duty. The duty liability on the appellant gets reduced to that extent. The penalties under Section 11AC and Rule 25 are set aside – the appeals are disposed of
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