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2023 (9) TMI 804 - CESTAT KOLKATA
Clandestine Removal - control panels and fans - liability of duty on the goods cleared by them to their principal manufacture - Reversal of CENVAT Credit - allegation that the inputs were not received in their factory and cleared directly to their customers - Inclusion of drawings and design supplied by the principal manufacturer to the appellant.
Liability of appellant to pay duty on the goods cleared by them to their principal manufacture - HELD THAT:- In this case the principal manufacturer is sending inputs to the appellant on job work challans on which the appellant has not taken the cenvat credit and after job-work, the appellant is clearing the same to the principal manufacturer without charging any duty and the appellant is charging only the job-work charges and the principal manufacturer is discharging duty on final product. In that circumstances, relying on the decision of this Tribunal in the case of AUTOMATIVE STAMPINGS & ASSEMBLIES LTD. VERSUS COMMR. OF C. EX., VADODARA [2009 (6) TMI 773 - CESTAT, AHMEDABAD], wherein this Tribunal has observed We find no reasons to add the value of such lugs in the value of the clutch covers manufactured by the appellant, especially when such job has been done by the appellant in terms of Rule 4(5)(a) of the Cenvat Credit Rules, 2002 - the appellant is not liable to pay duty on job-worked goods.
Reversal of CENVAT Credit - allegation that the inputs were not received in their factory and cleared directly to their customers - HELD THAT:- Although the goods were not received in their factory and cleared directly to their customers, but on payment of duty. When the inputs have been cleared to their customers directly on payment of duty, the payment of duty shall be treated as reversal of cenvat credit as held by the Hon’ble Bombay High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [2012 (7) TMI 141 - BOMBAY HIGH COURT], wherein Hon’ble the Hon’ble High Court has observed once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture - he appellant is not required to reverse the cenvat credit on the input cleared without receiving in the factory on payment of duty.
Inclusion of drawings and design supplied by the principal manufacturer to the appellant - HELD THAT:- The inclusion sought to be made in the assessable value on the basis of imaginary figures, which is not sustainable. It is a fact on record that the appellant has not borne any cost of drawings and design supplied by the principal manufacturer and the principal manufacturer has borne the cost of design and drawings and paid duty on their final product - the cost of design and drawings cannot be included in the job-charges of the appellant, therefore, no duty is payable by the appellant.
The impugned order is set aside and in the result, the appeal is allowed.