2011 (4) TMI 140 - AT - Central Excise

Demand - In the absence of any order staying the operation of the Tribunal s final order in the case of the same assessees the relevant portion of which is reproduced herein below - It has not been disputed by the Revenue that the appellants are placing purchase orders on suppliers for manufacturing ad supplying various washing machine parts - The Tribunal has already held in a number of decisions starting from M/s. Monica Electronics that it is not necessary for the purpose of sub-rule (8) of Rule 57S that only those persons will be termed as job workers whom the raw materials are supplied to - The cross-objection is dismissed as it is only in the nature of counter to/reply to the Revenue s appeal

Summary

Issues:
- Challenge to lower appellate authority's order
- Interpretation of job work basis in relation to manufacturing parts of washing machines
- Application of Rule 57S of the Central Excise Rules, 1944
- Dismissal of cross-objection

Analysis:
1. The main issue in this case revolves around the challenge to the lower appellate authority's order by the Revenue. The lower appellate authority had relied on a previous Tribunal decision to set aside a demand and penalty imposed against the appellants. The Revenue contended that an appeal had been filed before the High Court, but without any stay order on the Tribunal's final decision, the order was reproduced to support the appellants' position regarding job work basis.

2. The interpretation of job work basis in the context of manufacturing washing machine parts was crucial in this judgment. The Tribunal analyzed the situation where suppliers manufactured parts as per the design and specification provided by the appellants. It was established that the suppliers were working on a job work basis, as defined in the Short Oxford Dictionary. The Tribunal referred to Rule 57S of the Central Excise Rules, 1944, which allows manufacturers to remove moulds and dyes to the job worker's premises for production without duty payment, emphasizing that job workers need not receive raw materials to qualify as such.

3. The application of Rule 57S played a significant role in the Tribunal's decision. The rule's sub-rule (8) was highlighted as a non-obstante clause empowering manufacturers to engage job workers for production according to their specifications without duty payment for moulds and dyes. The Tribunal cited previous decisions to support the interpretation that supplying raw materials to job workers was not a prerequisite under this rule. Consequently, the impugned order was set aside, and all appeals were allowed based on this analysis.

4. Lastly, the judgment addressed the dismissal of the cross-objection, noting that it was merely a response to the Revenue's appeal and did not warrant further consideration. The Tribunal upheld the impugned order and rejected the appeal, concluding the matter in favor of the appellants. The decision was dictated and pronounced in open court, finalizing the resolution of the issues raised in the case.