TMI Blog2011 (4) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the benefit of Notification No. 217/86-C.E., dated 2-4-1986 - Decided in favour of the assessee - E/298/2010 - A/699/2011-WZB/AHD - Dated:- 28-4-2011 - Dr. P. Babu, J. REPRESENTED BY : Shri R. Nagar, SDR, for the Appellant. Shri P.G. Mehta, Advocate, for the Respondent. [Order]. This is an appeal filed by the Revenue against the order-in-appeal passed by Commissioner (Appeals)-I, Central Excise, Ahmedabad. M/s. Patel Alloys Steel Pvt. Ltd. unit No. II were receiving goods in their parent unit under challan and were carrying out the process of machining on job work basis in terms of Notification No. 214/86-C.E., dated 25-3-86 and they were not paying any duty. The contention of the Revenue is that Sub-Rule 4(6) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the whole of duty. They cited a plethora of judgments in favour of their argument. [Case laws of M/s. Bajaj Tempo Ltd., reported at 1994 (69) E.L.T. 122 (Tri. - Bom.), M/s. Sterlite Industries (I) Ltd. v. CCE, Pune reported at 2005 (183) E.L.T. 353 (Tri. - LB), Escort s Ltd. v. CCE, - 2004 (171) E.L.T. 145 (S.C.), M/s. Sagar Twisters reported at 2005 (188) E.L.T. 497 (Tri. - Mumbai), M/s. Arvind Mills Ltd. v. CCE, Ahmedabad reported at 2005 (182) E.L.T. 362, M/s. Kyungshin Industrial Motherson Ltd. v. CCE, Chennai reported at 2007 (216) E.L.T. 719 (Tri. - Chennai) and M/s. Sanshu Industries reported at 2007 (220) E.L.T. 481 (T)]. 3. Sub-Rule 4(6) of Cenvat Credit Rules, 2004 reads as follows : No CENVAT credit shall be allowed an cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C. Inasmuch as, the matter stands decided by the Honourable Supreme Court, we would hold in favour of assessee. 5. As regards the decision in the case of Alpha Lavan laying down that the Modvat credit could be claimed in such a situation, we find the earlier decision of the Bajaj Auto was not followed. However, in view of the facts that the ratio of Bajaj Auto decision stands approved by the Supreme Court decision in the case of Escort Ltd. referred supra, we are of the view that the Alpha Lavan is no longer good law. 5. The wording used in Rule 4(6) of the Cenvat Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the cenvat credit taken by the assessee on capital goods is admissible who is carrying out the process of job work under Notification No. 214/86. My view is further fortified by the decision of the Apex Court in the case of CCE v. Hindustan Sanitaryware Industries, 2002 (7) SCC 515 = 2002 (145) E.L.T. 3 (S.C.), wherein in respect of this very notification, this Court has held that so long as duty is paid on the final product, the mere fact that duty was not paid on the intermediate product would not disentitle the manufacturer from the benefit of Notification No. 217/86-C.E., dated 2-4-1986. Considering the facts and various legal pronouncements as above, I disallow the appeal filed by the Revenue. (Pronounced in Court on ) - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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