TMI Blog2011 (2) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the manufacture of final products in terms of the provisions of SECTION AA of Chapter V of the said Rules, the credit in respect of such inputs shall be allowed under rule 57B of the said Rules, at the rate of duty otherwise applicable, but for this notification. - Decided in the favour of Assessee - E/2850 to 2853/1990 - - - Dated:- 23-2-2011 - Shri M.V. Ravindran, Shri P.R. Chandrasekharan, JJ. Appearance: Shri Bharat Raichandani, Advocate for the appellant Shri V.K. Singh, Authorised Representative (SDR) for the respondent Per: P.R. Chandrasekharan: This appeal is directed against the Order-in-Original No: 9/90 dated 04/04/1990 passed by the Collector of Central Excise, Nagpur. 2. The said order was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the assessee should have taken the credit of the duty paid on the raw material and dispatched the goods for manufacture on job-work basis to the job-workers who in turn should have manufactured the goods and cleared the same to the assessee without payment of duty under Notification No. 214/86-CE as amended. In other words, the allegation was that the assessee was not entitled to avail the higher modvat credit under Rule 57B read with Notification No. 175/86 and they should have necessarily followed the procedure prescribed under Rule 57F relating to the job-work procedure. The adjudicating authority, who examined the matter came to the conclusion that the transaction between the job-workers and the principal manufacturer, namely, M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkers are the manufacturers. The said order attained finality as it was not challenged by the department. As regards the present order of the Collector of Central Excise, Nagpur, the assessee contends that he is not the manufacturer of the wires produced by the job-workers and in support thereof, relies on the judgment of the Hon'ble Bombay High Court in the case of Commissioner of Central Excise Customs, Aurangabad vs. Mahyco Seeds Ltd. 2005 (182) ELT 163 and the judgment of the Hon'ble apex court in the case of Collector of Central Excise, Baroda vs. M.M. Khambhatwala 1996 (84) ELT 161 (SC) wherein it has been held that the job-workers are manufacturers in their own right and the raw material supplier cannot be held to be the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead to pay central excise duty on the goods cleared from his factory after claiming the benefit of the modvat credit of the duty paid on the inputs against the duty payable on the finished excisable goods. The Hon'ble High Court further held that there is nothing in Rule 57F(2) which would in any way indicate that if a manufacturer wants to avail of the benefit of modvat facility under Rule 57A, it is obligatory on him to follow the procedure laid down in Rule 57F(2). In the light of these submissions, the learned counsel for the appellant submitted that the order passed by the Commissioner of Central Excise, Nagpur is devoid of merits and needs to be set aside and the appeals allowed. 4. The learned DR, on the other hand, would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of determining the exemption under Notification No. 175/86 or its successor Notification No. 80/80-C.E. Therefore, in the case under consideration, it cannot be held that the manufacture undertaken by the job-workers was on behalf of the assessee. 6. Further, in the case of Facit Asia Ltd. vs. Collector of Central Excise 1991 (54) ELT 347 the Madras Bench of the Tribunal held that modvat credit cannot be denied to a manufacturer just because his job-workers paid duty on the intermediate components under the normal procedure instead of returning them to the manufacturer without payment of duty under the provisions of Notification No. 214/86. The Tribunal further held that the job-worker cannot be forced to avail the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty leviable thereon on the basis of value of clearances of such inputs during any specified period be allowed at the rate otherwise applicable to such inputs but for the said notification subject to the condition that the Notification provides for grant of credit in respect of such inputs at such higher rates. In the instant case, duty liability has been discharged by the job-workers under Notification No. 175/86 dated 01/03/1986. Para 5 of the Notification as it stood at the relevant time provided that: "5. Notwithstanding the exemption granted by this notification, in respect of the specified goods which are subjected to concessional rate of duty (other than those specified goods which are wholly exempted from the duty of excise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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