TMI Blog2001 (9) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured by M/s. Sagun on job work basis from the raw materials supplied by M/s. Bharat. M/s. Bharat were receiving duty paid pig iron, C.I. scrap and coke. No Modvat credit was taken on the duty paid in respect of such pig iron and C.I. scrap etc. The castings so manufactured by M/s. Sagun were sent back to M/s. Bharat under the provi sions of Rule 57F(4) of the Central Excise Rules, 1944 (hereinafter referred to as the Rules ). The castings were being sent under the cover of challans since 5-8-1994. The C.I. castings so received by M/s. Bharat from M/s. Sagun were used in the manufacture of exempted power driven (PD) pumps classifiable under sub-heading No. 8415.11 of the Central Excise Tariff. The allegation against noticees as levelled in the show cause notice dated 28-4-1999 was that with regard to the castings in question, the benefit of exemption notification No. 214/86-C.E., dated 25-3-1986 had been wrongly availed of during the period 5-8-1994 to 2-1-1996 and 18-4-1997 to 15-6-1997, although the benefit of this exemption notification was not available to the castings used in the manufacture of exempted goods. Extended period of limitation was invoked for demanding the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pumps were not exempt and some were dutiable. Reference was made to the Board s Circular to plead that the benefit of notification was correctly availed of by M/s. Sagun. Duty was leviable on PD Pumps but exemption was provided by notification. It could not be said that no duty was leviable on the exempted PD Pumps. In no case, duty could be demanded from the job workers when the inputs and the semi-finished goods moved under the proper procedure prescribed for Rule 57F of the Rules. There was no ground for de manding Central Excise duty and for imposing any penalty. Reliance was placed on the Tribunal s decision in the case of Aggarwal Rollings Mills v. CCE, New Delhi, 1997 (93) E.L.T. 615 (T). Shri Bipin Garg appearing for M/s. Bharat and other noticees referred to the legal provisions, the procedure prescribed and the declarations, records, returns, accounts filed and maintained by the appellants to plead that the imposition of penalty on any of them was not justified. Reliance was placed upon a number of decisions rendered by different forums. 4. We have carefully considered the matter. M/s. Sagun were engaged in the manufacture of castings classifiable under sub-headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty of Excise at the rate other than nil rate. Also, M/s. B.E. never filed the undertaking as required under Notfn. No. 214/86-C.E., dt. 25-3-1986 as amended. Both M/s. B.E. and M/s. SFPL also suppressed the fact of manufacture of C.I. Castings on job work basis, which were to be used in the manufacture of PD Pumps by not giving it a mention in their Classification Lists/Declaration u/r 173B and RT-12 returns filed from time to time. M/s. B.E. also never produced 57F(3)/(4) challans, covering the manufacture and receipt of C.I. Castings meant for P.D. Pumps to their Range Officer. M/s. SFPL also never accounted the said C.I. Castings in their RG-I without showing the fact of clearances of such C.I. Castings in their RT-12 s return. Thus, from the above facts, it is revealed that the. C.I. Castings for exempted goods were being manufactured and cleared in connivance of both M/s. SFPL M/s. B.E. without payment of Central Excise duty by suppressing the facts and wilful contravention of provisions of Central Excise Rules, as mentioned here-in-above below with full knowledge and with intention to evade payment of duty payable on such castings. Therefore, proviso to sub-section (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as under :- We are also undertaking job work of M/s. Bharat Electricals, 37/B, Dadana-gar, Kanpur for components/parts of IC engine and PD Pumps as per patterns supplied by them for which raw material i.e. pig iron/CI scrap and hard coke is being supplied by M/s. Bharat Electricals under cover of prescribed job work challan and after processing on their raw materials we return their semi-finished castings (parts/components of IC Engine and PD Pumps) on subsidiary challans within 60 days of receipt of raw material. We maintain record of their raw material and castings as prescribed for job worker. 8. It was a fact that P.D. Pumps were exempt from duty. M/s. Sagun were not manufacturing P.D. Pumps. The P.D. Pumps were being manufactured by M/s. Bharat who in their classification list had clearly indicated nil duty under Col. 8. The fact that the exemption from payment of duty on P.D. Pumps under relevant exemption notifications was being claimed and mentioned by M/s. Bharat in various classification lists/declarations filed under Rule 173B of the Rules effective from 1-3-1994 onwards had been mentioned in para 5 of the show cause notice dt. 28-4-1999. 9. We have gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . SFPL M/s. B.E. In this regard they relied upon the following evidences : (a) Application under Notfn. No. 214/86, dt. 11-3-1994 submitted by M/s. B.E., which was duly acknowledged in the Division office on 11-3-1994. (b) Challans issued under Rule 57F(2) and Notfn. No. 214/86 by M/s. B.E., which have been duly authenticated by the concerned Inspector. (c) Classification lists/declarations under Rule 173B submitted by M/s. B.E., periodically to the divisional Assistant Commissioner in which it was categorically mentioned that they shall be getting job work done under Rule 57F(2)/(3)/(4). 11. We also take note of the following facts :- (i) M/s. Bharat Electricals were registered with the department and were paying Central Excise duty and had applied for job work under Rule 57F(2) and Notification No. 214/86-CE, they were availing of the facility of Modvat credit. They had filed an undertaking in terms of Notification No. 214/86-CE (refer page 40 of the reply to the show cause notice by M/s. Sagun in para 6). The copy of the declaration dated 11-3-1994 is at page 51 of the paper book. The classification list effective from 18-3-1994 is at page 180 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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