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2019 (2) TMI 1235 - AT - Central ExciseJob work - duty liability is on Job worker or on principal - readymade garments (trousers) - Neither M/s Ayush Apparel nor Job worker M/s S.P. Associates paid the duty on the said readymade garments - Revenue’s contention is that the cum duty benefit extended by the Commissioner is not correct - Held that:- During the relevant period, in terms of Rule 7 AA of Central Excise Rules, 1944, there is a specific provision that in case of Job work, the principle was supposed to pay the duty unless and until he authorizes the job worker to discharge the duty. In the present case, the principal that is M/s Ayush Apparels has not authorized the job worker M/s SP associates to discharge the Excise Duty. Therefore, the M/s Ayush Apparels was legally liable for payment of duty even though he did not manufacture the goods and the job worker has manufactured the goods. Accordingly, there is no doubt that the principal M/s Ayush Apparels is liable to pay the duty. As regard the submission of Ld. Counsel that the manufacturer alone has to discharge the duty, it has no force for the reason that as per section 3 of Central Excise Act, 1944, it is provided that “there shall be levied and collected in such manner as may be prescribed a duty of excise”. As per this provision, the Government has power to prescribe the manner of levy and collection of duty. In the case of readymade garments, the Government has prescribed the manner by way of Rule 7AA in the Central Excise Rule, 1944. Therefore, by this specific provision even though in normal course, a manufacturer is supposed to pay duty but, in this case, the principal supplier of Raw material is legally liable to pay the duty. Therefore, the demand confirmed on the principal M/s Ayush Apparels is in principle upheld. Cum-duty benefit - Held that:- There is nothing wrong in that benefit given by the Commr. (A) as the same was on the basis of Hon’ble Supreme Court judgment in the case of Maruti Udyog Ltd. [2002 (2) TMI 101 - SUPREME COURT]. Appeal allowed in part.
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