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2017 (1) TMI 223 - AT - Central ExciseJob work - Liability of duty - Denial of exemption Notification No. 3/2001-CE - denial on the ground that Babcock is clearing boilers in CKD form and not the complete boiler - Held that: - In the appellant’s own case i.e. Thermax Babcock & Wilcox Ltd v. Commissioner OF Central Excise [2015 (5) TMI 631 - SUPREME COURT] and Commissioner of Central Excise v. Thermax Babcock & Wilcox Ltd [2005 (1) TMI 145 - CESTAT, MUMBAI] on the issue of classification in respect of removal of pressure parts of boiler, it was held that the manufacture and removal of boiler in part consignments shall be regarded as boiler in complete form - the boiler even if cleared in CKD/SKD condition to the customers site, the same is regarded as boiler and is eligible for exemption. CENVAT credit - job-work - inputs sent to job-worker - Rule 4(5)(a) of the Rules - Held that: - the appellant are paying 8% on the clearance of boiler under Rule 6 of the CENVAT Credit Rules, 2002. Therefore, they are entitled for CENVAT credit in respect of inputs used in the manufacture of exempted boiler - demand of CENVAT credit on the inputs sent for job-work by Babcock is not sustainable. Liability of duty - whether Thermax is liable to pay duty on the parts manufactured on job-work basis and cleared to the principal Babcock is liable for duty? - Held that: - in the said notification, there is a condition that job-worked goods should be used in the manufacture of final products of the principal and the principal, on the final products so manufactured out of the job-worked intermediate goods, should pay duty on the final product. In the present case, the principal cleared the final products i.e. boiler without payment of duty under exemption Notification No.3/2001-CE dated 01/03/2001. Therefore, even if Notification No. 214/86-CE dated 25/03/1986 is not applicable, it is very clear that any manufacturer, whether on job-work basis or otherwise, manufactures any goods, being the manufacturer of such goods, is liable to pay duty. Payment of duty can only be avoided only when there is an exemption notification on the said goods. In the appellants case, the parts of boiler manufactured by the job-worker undoubtedly dutiable goods. When the principal manufacturer is not discharging excise duty on the boiler, the job-worker, Thermax, is liable to pay duty on the parts manufactured by them and supplied to Babcock. Whether there is any provision for exemption from payment of duty in the case of job-worker under Rule 57F(4) or otherwise? - Held that: - there are contrary views on the issue as to dutiability on the job-worker, for resolving the conflict it is desirable to refer the particular issue to the Larger Bench - who is liable to pay duty, matter referred to Larger Bench
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