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2015 (4) TMI 851 - AT - Central ExciseArea based exemption - Manufacturing activity or not - Job work - Activity of winding the wire on the stator and thereafter were putting varnish on the wires wound on the stators, receipt of stamping rotors and electrical grade aluminum and also dies and making cast, machined and painted rotors, which were being sent back to the principal manufacturer - Held that:- duty would be chargeable on the goods being made by the appellant on job work basis only if, those goods are in fully finished condition and the same are being used by KEL as parts of fans without any further processing. But if, the items being cleared by the appellants are in the nature of semi finished goods which require further processing by KEL for being used as parts of the fans, the same cannot be treated as marketable and hence, excise duty would not be chargeable. As regards, the question of limitation it is seen that so far as SE are concerned, there was correspondence between KEL and the Department with regard to sending of semi finished/ raw material to SE for certain job work and hence, it cannot be said that the Department was not aware of the activity of SE. Similarly, in respect of JMAPL, it is seen that during 2004, there was correspondence between them and the Department with regard to the nature of their activity and whether they are eligible for exemption under notification no. 50/03-CE and from this correspondence also it is clear that the Department was aware about the nature of their activity. In any case, when both JMAPL and SE could have availed the full duty exemption under notification no. 50/03-CE just by filing the declaration and they did not file the declaration for availing of this exemption under belief that there activity does not amount to manufacture, no malafide can be attributed to them. In view of this, even if there is any duty demand confirmed against the appellant, the longer limitation under proviso to section 11A(i) would not be applicable and for the same reason, penalty under section 11AC would not be imposable. - Matter remanded back - Decided in favour of assessee.
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