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2023 (9) TMI 1096 - CESTAT AHMEDABADCENVAT Credit - fabrication of ACN Reactor in the premises of M/s L&T, Hazira (Principal manufacturer) - process amounting to manufacture or not - benefit of N/N. 214/86-CE dated 25.03.1986 - HELD THAT:- It is not in dispute that the entire activity has been carried out within the premises of M/s L&T Limited, Hazira and that M/s L&T Limited, Hazira has discharged the duty liability on the final product cleared by them from their factory premises. The process undertaken by the appellants is a process incidental or ancillary to the final manufacture of the finished goods cleared by M/s L&T Limited, Hazira. In the above background, it cannot be denied that the activity undertaken by the appellants is an activity of manufacture. Notification 214/86-CE grants exemption from central excise duty on certain activities which are undertaken by a job worker and where the principal manufacturer undertakes to pay the central excise duty on the final products cleared by them. The notification 214/86-CE prescribes detailed procedure for movement of goods and for the principal manufacturer to discharge the duty liability on the final products. The entire procedure prescribed under Notification 214/86-CE is a procedure which takes care of situation where the job worker is located away from the principal manufacturer at a different location - the notification requires an undertaking by the principal manufacturer to ensure that the goods manufactured / processed by the job worker are not diverted and proper duty is paid thereon. In the instant case, the entire activity is undertaken within the premises of the principal manufacturer, therefore much of the procedure loose significance. The appellants have not specifically claimed the benefit of 214/86 and have not followed the procedure prescribed for availing the Notification. The procedure not followed by them relates to the making of challans for movement of goods and obtaining an undertaking from the principal manufacturer regarding payment of duty on the finished goods. In the instant case, since the goods remain within the premises of principal manufacturer the need of challans for movement loses its relevance. Similarly, since the entire raw material as well as finished goods remains within the premises of the principle manufacturer, the need to undertaking payment of duty on the intermediate goods used by principal manufacturer for manufacture of dutiable finished goods loses much of the relevance. In the case of STERLITE INDUSTRIES (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [2004 (12) TMI 108 - CESTAT, MUMBAI] where it was held that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C - The said decision of Tribunal has been upheld by Hon’ble High Court of Bombay in COMMISSIONER VERSUS STERLITE INDUSTRIES (I) LTD. [2008 (8) TMI 783 - BOMBAY HIGH COURT]. The decision of the Larger Bench in the case of Sterlite Industries Limited is equally applicable to the current situation - Appeal allowed.
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