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2022 (5) TMI 564 - AT - Central ExciseLevy of Central Excise duty - intermediate goods used in the manufacture of exempt final goods - whether Central Excise Duty is payable on the intermediate products viz. Brass Casted Road, manufactured at their unit own by appellant and Job Work Basis and further used in manufacture of exempted final products viz. Brass Parts of Agriculture Products which is exempted from payment of Central Excise Duty? - denial of benefit of exemption N/N. 67/95-C.E. in respect of intermediate products viz. Brass Casted Rod used captively for manufacture of exempted goods - denial on the ground that the exemption contained in the said Notification does not apply to inputs used in or in relation to the manufacture of final products which are exempted from the whole of duty of excise leviable thereon or are chargeable to ‘NIL’ rate of duty. HELD THAT:- From the Rule 6 it can be seen that as per sub-rule (1) of Rule 6, the assessee is not required to avail the Cenvat credit in respect of the inputs used in the manufacture of exempted goods. As per the fact of the present case it is undisputed fact that the appellant during the impugned period not registered with the Central Excise Department, hence, has not availed the Cenvat credit in respect of any of the inputs used either in the final product or in the intermediate product i.e.,Brass Casted Rods. Therefore, the condition of sub-rule (1) of Rule 6 stands complied with. The finding of the adjudicating authority as regard the applicability of above notification is misleading and absolutely incorrect - the appellant has discharged the obligation under Rule 6(1) accordingly they are legally entitled for the exemption Notification No. 67/95-C.E., dated 16-3-1995 in respect of their intermediate product i.e., Brass Casted Rods. In the present matter appellant also claimed exemption alternately under the provisions of Notification No. 08/2003 -CE dated 01.03.2003. Since as per the finding appellant are legally entitled for the exemption Notification No. 67/95-C.Edated 16.03.1995 in respect of their intermediate products i.e. Brass Casted Rods, the alternative exemption claimed by the Appellant, need not be discussed. Whether any exemption from duty can be available to the Appellant as regard to the intermediate products viz. Brass Casted Rods manufactured by the Appellant through Job Worker and further used in manufacture of exempted goods? - HELD THAT:- In the present matter Learned Adjudicating Authority disputed benefit of the N/N. 84/1994-CE dated 11.04.1994 only on ground Appellant have cleared their raw materials or semi-finished goods to the job-worker and received intermediate goods viz., Brass Casted Rods manufactured by the Job-Worker without following the prescribed conditions, without preparing the job- work challans and without maintaining any records. However, the said notification grants exemption to the specified goods manufactured in a factory of job worker subject to only condition that the supplier of raw materials or semi-finished goods gives an undertaking to the proper officer having Jurisdiction over the factory of the Job Worker. In the instant case in para 38 of impugned order the Ld. Adjudicating authority itself admitted that Appellant has given undertaking. Therefore, benefit of said notification cannot be denied on this ground alone. Without prejudice, as regard the said issue it is also found that even if the benefit of job-work notification denied to the Appellant, the duty liability rests on the job worker. Therefore, the show cause notice demanding duty from the Appellant on the goods manufactured by the Job-worker cannot be sustained. Once the Revenue took a view that the inputs could not have been sent to a job worker claiming the Job-work exemption Notifications and the process undertaken by the job worker amounted to manufacture and resulted in products namely, Brass Casted Rods, the duty liability would fall on the manufacturer who is a job worker in this case and not on the appellant. Since duty demand has been made on Brass Casted Rods and the appellant is not a manufacturer of the same, the demand is not sustainable and accordingly, the impugned order demanding duty from appellant is legally not correct. In the facts and circumstances of the present case, the demand on this count also must be quashed and set aside. Since the entire demand has been set aside, consequently penalties and demand of interest are also set aside - Appeal allowed - decided in favor of appellant.
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