TMI Blog2011 (6) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order which upholds the said order-in-original and we hold accordingly. Liability of payment of duty - held that:- it is seen from the records that the job work transaction was undertaken under Rule 57F (2) and, therefore, there is no responsibility on the job worker to discharge any duty liability. This position was also reaffirmed by this Tribunal in the case of M.Tex & D.K. Processors (2000 -TMI - 50278 - CEGAT, NORTHERN BENCH, NEW DELHI) - Decided in favor of assessee. - E/477 & 478/04 & E/442/04 - - - Dated:- 30-6-2011 - Mr. Ashok Jindal, Mr. P.R. Chandrasekharan, JJ. Appearance: Ms.Aparna H. Advocate for appellant Shri.A.K.Prabhakar, JDR, for respondent Per: P.R. Chandrasekharan 1. There are three appeals, two filed by the appellants M/s.Saurabh Organics Pvt. Ltd., and third one filed by the Commissioner of Central Excise, Thane, against the order No. No.PD/135/Th-II/2003 dated 30/10/2003 passed by Commissioner of Central Excise (Appeals), Thane-II. As the issues involved in all these appeals are the same, we take up all the appeals together for disposal. 2. Briefly stated the facts of the case are as follows: 2.1 The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, the departmental officers worked out the amounts payable by the appellants under Rule 57CC at Rs.2,69,376/-. 2.2 A show-cause notice dated 04/04/2002 was issued to the appellants proposing to recover a duty amount of Rs.1,83,133/-, on PNA manufactured on job work basis for AIPL, under section 11A of the Central Excise Act, 1944 and also proposing to recover an amount of Rs.2,69,376/- under Rule 57CC at 8% of the value of the PNA manufactured and cleared without payment of duty under rule 57F(4) procedure. It was also proposed in the said show-cause notice to recover interest on the above amounts under Section 11AB of the Central Excise Act and to impose a penalty under Rule 173Q of Central Excise Rules, 1944/Rule 25 of Central Excise Rules, 2001 and Section 11AC of the Central Excise Act. The case was adjudicated by the jurisdictional Additional Commissioner, who confirmed the duty demands as mentioned above and also imposed equivalent penalty under Section11AC of the Act. Further, a penalty of Rs.50,000/- was imposed on Shri Kiran Atmaram Patil, Director of the appellant company under Rule 209A of the Central Excise Rules, 1944. The adjudicating authority further ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r raw materials PNCB was being supplied by AIPL and the other raw materials such as ammonia, LDO, HDPE bags, etc. were being used by them from their own accounts and the cost of the same were not included in the assessable value. However, while confirming the order, the Ld. Addl. Commissioner found that the appellants did not include the cost of the raw material, viz., PNCB, in the assessable value of PNA. Thus, the allegation in the show-cause notice and the findings given in the order-in-original are altogether on different grounds and contradictory. Therefore, the order-in-original confirming the duty demand on a ground, which is totally different from the ground raised in the show-cause notice traverses beyond the scope of show cause notice and, therefore, is not sustainable and consequently, the order-in-appeal upholding the said order-in-original is also not sustainable. 3.2 The Ld. Counsel further contends that the appellant had charged duty at different rates at different times on goods supplied to AIPL varying from Rs.34.84 to Rs.69/- per kg. based on the prevalent marketing conditions. However, while confirming the duty demand, a uniform price of Rs.69/- per kg. ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bihar, reported in 2005 (183) ELT 239 (SC). In the said case, the decision pertained to inputs suppied by the final product manufacturer to intermediate product producer, who was using his own inputs as well. The transaction between the intermediate product producer and the final product manufacturer was covered by rule 57F(2) (b) of the Central Excise Rule, 1944. In the said case it was held that the manufacturer of final product is entitled not only to adjust the credit on inputs supplied by it to the appellant (intermediate product producer) but also to credit for duty paid by appellant on its products and the appellant was not liable to pay duty on the inputs supplied by final product manufacturer since it had not taken credit for Modvat in respect of inputs. In their case, they have not taken any credit of duty paid on the PNCB supplied to them by the principal manufacturer and also on the inputs used from their own account, namely, ammonia, LDO, HDPE bags, etc. In the said judgement it was further held that value of materials received under Rule 57F (2) by the job worker is not includable for the purpose of payment of duty when credit was not taken. The ratio of this judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -original and we hold accordingly. 5.2 As regards the demand for payment of an amount @ 8% of the value of the exempted goods under Rule 57CC of the Central Excise Rules, 1944 made out in the show-cause notice, it has been noted that the appellants have not availed any credit of the duty paid either on the raw materials supplied by the principal manufacturer or on the raw materials used by them on their own account in the manufacture of job-worked product. When they have not availed any credit of the duty paid on the raw materials, the question of payment of duty @ 8% of the value of the exempted product under Rule 57CC will not arise at all. This point has been completely missed out by the lower authorities. Further as has been held by the hon'ble apex Court in the case of International Auto, the job worker is not liable to pay duty on inputs supplied by the final product manufacturer since they have not taken the modvat credit in respect of inputs, when they are operating under Rule 57F (2). In the instant case also, it is seen from the records that the job work transaction was undertaken under Rule 57F (2) and, therefore, there is no responsibility on the job worker to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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