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2016 (4) TMI 187 - AT - Central ExciseCENVAT credit on the input used by the jobworker for the manufacture of goods on jobwork basis under Notification No.214/86-CE dated 25.03.1986 admissible - demand was raised for an amount equivalent to 10% of the value of the goods which was manufactured by the appellant on jobwork basis which was returned without payment of duty to the principal supplier of raw material in terms of Notification No.214/86 - Held that:- As per the condition of the Notification 214/86 principal supplier of raw material indicates to discharge the excise duty either on the jobwork goods itself or on the final product in which jobwork intermediary goods is used. With this proviso it can be said that the goods manufactured on jobwork basis is exempted from payment of excise duty. It is that the Notification 214/86 only facilitates the principal supplier of raw material to avoid payment of duty at two stages, (1) at jobwork stage and (2) at the stage of final product clearances. However, the amount of duty required to be paid will remain same as if no duty is charged at the jobworker end the same shall be available as CENVAT credit to the principal supplier of raw material. It is only for the convenience of the procedure, Notification 214/86 was issued and not to exempt any excise duty. Since the goods manufactured on jobwork basis is exempted on the ground that the excise duty is charged on the full value of final product wherein the value of jobwork goods deemed to have been included the jobwork goods is not exempted. Therefore, Rule 6(3)(b) which is applicable only on the clearance of exempted goods shall not apply in the case of the goods manufactured on jobwork basis under Notification 214/86 The issue involved in the present case has been decided in a number of cases and accordingly the demand raised for an amount equivalent to 10% of the value of jobwork goods in terms of Rule 6(3)(b) is not sustainable. - Decided in favour of assessee
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