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2005 (12) TMI 16 - AT - Central ExciseCentral Excise - Modvat credit (1) Job work (2) Credit on capital goods (3) Exempted goods - HELD THAT:- It was observed that, in the special procedure laid down under Rule 57F (3), duty did not get paid at the job worker's end at the time of clearance of goods, but ultimately got paid at the principal manufacturer's end. In other words, assessable value of the goods cleared by the job worker without payment of duty to the principal manufacturer would ultimately become an ingredient of the assessable value of the final product cleared by the latter on payment of duty. Thus, duty gets paid on the job-worked goods at a later stage and, therefore, such goods cannot be categorized as "exempted goods" for purposes of Rule 57C or Rule 57R. Thus, the Larger Bench decision in Sterlite Industries (I) Ltd. Vs. Commissioner [2004 (12) TMI 108 - CESTAT, MUMBAI], operates in favour of the respondents. In the instant case, it has been submitted on behalf of the respondents that the capital goods in question might be used, at some time in future, for manufacturing piston valves or other parts of IC Engine otherwise than on job work basis and the products so manufactured might be cleared on payment of duty. In such an eventuality, the capital goods in question would be eligible for Modvat credit. Then alone will the credit in question be utilized. In the event of the respondents not using the capital goods for manufacture of dutiable goods at any time in future or closing down their factory, the credit would lapse. These submissions of learned Consultant are acceptable. In the result, the impugned order gets affirmed and this appeal is dismissed.
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