TMI Blog1999 (10) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... tor. 2. Brief facts are : M/s. Super Poly Fabrics Ltd. as well as M/s. Fine Fabricators are manufacturers of HDPE bags and sacks falling under Chapter Heading 39 of the Central Excise Tariff Act, 1985. They paid Central Excise duty at the time of clearance of bags and sacks. They also availed the benefit of SSI exemption Notification No. 1/93. 3. According to the Appellants, M/s. Fine Fabricators (FF for short) send HDPE granules to M/s. Super Poly Fabrics Ltd. (SPF for short) for the manufacture of fabrics on job work basis in terms of Notification No. 83/94 and 84/94-CE as per declaration filed by them. SPF in turn convert the granules into fabrics and send them back to FF who thereafter manufacture sacks out of the said fabrics. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products cleared by the manufacturers availing the benefit of Notification No. 1/93 after they cross clearances of value of Rs. 30 lakhs. Goods cleared at the earlier stages are not to be taken into account for purposes of considering availability of exemption below the said limit. Reliance was placed on the Tribunal s decision in Dukart and Company v. C.C.E., 1987 (29) E.L.T. 446 delivered in the context of Notification No. 80/80 and Explanation (vi) to the said Notification. The majority decision in the said judgment had taken the view that while granting exemption to small scale manufacturers based on value of clearance, the intention was that the specified goods used for further manufacture of specified goods within the factory of produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory of the job workers has to be specified in Notification No. 1/93, it apparently refers to the goods cleared from the job workers premises to the supplier of raw material as would be evident from condition (a) which requires the specified goods to be used in the factory of the suppliers of the raw material. It is urged that expression job work in Notification 83/94 encompasses the entire set of processes starting from work on the raw materials to the manufacture of the finished articles. Appellants argue that the expression specified goods vis-a-vis the definition of job work is used only to refer to those goods that are cleared from the job worker s premises and does not refer to the goods that emerged at the intermediate stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been consumed not in the manufacture of sacks, but in the manufacture of fabrics which are not covered by Notification No. 1/93. Ld. Counsel point out that though the demand was raised against the supplier of the raw material in the show cause notice, in the adjudication order and in the order in appeal, the same had been dropped. Finally since plastic strips are exempt from payment of duty under Notification No. 214/86, the benefit of the Notification was available for the manufacture of plastic strips. Appellants therefore, have sought the quashing of the duty demand on SPF and the penalties imposed both on SPF and FF. 7. The Department s case is that since there was no dispute that plastic strips manufactured at the intermediate st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the job worker and not to carrying out of any manufacturing activity on behalf of the supplier of the raw material. Job work was restricted to carrying out the processing or finishing of material supplied to him and its return to the supplier of raw material for the manufacture of finished product. In the facts of the instant case FF who are a SSI unit were not competent to supply plastic granules SPF for the manufacture of plastic fabrics on job work basis and claim benefit of Notification Nos. 83/94 and 84/84. The authorities below had therefore, correctly held that SPF were liable to pay the Central Excise duty on plastic strips captively consumed since as job worker, duty has to be discharged by them. 8. We have considered the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutes intention to evade the duty is not necessary. We are not able to give our unqualified endorsement to these observations. Where an assessee has on a mistaken idea about the availability of the benefit of an exemption notification failed to make payment of duty and had contested the duty demanded on a point of law, it will not be appropriate to impose penalty just because intention to evade duty in fiscal statutes was not necessary to be proved. We find that the appellants have even at the stage of replying to the Show Cause Notice maintained that emergence of plastic strips during manufacture of fabrics from plastic granules is inescapable. We are, therefore of the view that imposition of penalties is not warranted in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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