2005 (6) TMI 443 - AT - Central Excise

Summary

Issues:
Whether the appellants could conduct job work of printing Aluminium foils on orders of buyers without physically removing the same from the premises, and the applicability of Notification 214/86.

Analysis:
The issue in the appeals revolved around whether the appellants, without physically removing Aluminium foils from the premises, could undertake the job work of printing on orders of buyers and claim the benefit of Notification 214/86. The Commissioners proposed to demand duty based on Notification 1/93 but effectively denied the benefit of Notification 214/86. The appellants, formerly a licensed manufacturer, argued that the term "supplier of material" in Notification 214/86 did not require a sale to the buyers, as highlighted in the case of Maruti Udyog Ltd. The Tribunal noted that the notice admitted the issuance of Modvatable invoices by the appellant for plain foil, indicating no grounds to deny the job work at the appellant's premises.

The Tribunal referred to the case of Maruti Udyog Ltd., emphasizing that being the supplier of inputs and performing job work should not be a reason to deny procedural benefits. The Tribunal also considered whether the buyers availed credit for plain foil duty, finding no evidence to suggest otherwise. As the buyers were likely to have availed the credit, the duty levy was deemed unsustainable. Consequently, the appeals were allowed, and the duty levy was rejected.

In conclusion, the Tribunal's decision focused on interpreting the provisions of Notification 214/86 and assessing the appellants' eligibility to conduct job work without physically removing the material. The judgment highlighted the importance of considering the practical implications and the actual utilization of duty credits by the buyers in determining the duty levy's validity.