Activity of job work: Whether supply of manpower service or manufacture?

I am in agreement with the authors.

The only test of "manufacturer" is who bears the loss of production. In the above example, if A is responsible for process loss, definitely he is manufacturer.

It is right that for manufacturing capital goods is required, however, ownership of the capital goods is not required. just like raw material, where ownership is of principal, and job-worker only works on the raw material. Then why capital inputs require ownership?

Why to talk only about capital goods or raw material? labour is also required for manufacture. If own capital goods is required, then labour should not be hired, labour should be of self only. But it is not so.

Ownership either of capital goods or raw materials has nothing to do with manufacture, whoever does manufacturing work is a manufacturer.

So far exempted goods are concerned, when the goods are subjected to excise duty as per excise tariff and is exempted by a notification, the goods is still exciseable but for exemption.

Further, as the in-house job-work is used in factory, duty is required to be paid at one level only. Captive consumption notification can be applied here.

to sum up manufacturer is the person doing actual activity of manufacture either directly or through contract labour.

I agree that the clarity on this aspect is required.

Chauhan Anand N.

Anand Chauhan 05/02/2016