TMI Blog2012 (10) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... .V. EASWAR JJ. Petitioner: Mr. Kamal Nijhawan, Sr. Standing Counsel with Mr. Sumit Gaur, Advocate. Respondents: Mr. M.P. Devnath with Mr. Aditya Bhattacharya, Mr. Amar Pratap Singh and Mr. Abhishek Anand, Advocates. MR. JUSTICE S.RAVINDRA BHAT This appeal impugns the Final Order 875-883/2011 Ex DB dated 11.10.2011 passed by CESTAT (hereinafter Tribunal ) whereby the Respondents appeals against the Commissioner s (Central Excise, Delhi-I) Order-in-Original No. 30/2008 were partially allowed. The short question that arises for determination is as follows: Whether the respondents were liable to pay excise duty in respect of garment(s) stitched by them from fabric either brought by the customers themselves or bought by the customers from the Respondent for stitching purpose? 2. The facts relevant for answering this question are that respondents are engaged in the manufacture of readymade garments falling under the Chapter Heading 6201 of the First Schedule of the Central Excise Tarrif Act, 1985. The respondents are also engaged in stitching garments out of fabric bought by customers from their shop or brought by the customers from outside. In connection to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he responsibility to pay duty on textile articles got manufactured on job-work basis is put on the person who gets goods manufactured on job-work basis. He has to discharge such liability "as if he is the manufacturer". This rule does not say anywhere that the person supplying the raw material would be the manufacturer. The rule only says that such person has to discharge the liability and that in the normal course is done by the manufacturer. So the view that Rule 7AA will upset judicial decisions of the Apex Court is not correct There is no ruling by the Courts that a Rule cannot be framed to make the supplier of raw material liable to pay duty. This is to say that there is no ruling that a Rules like Rule 7AA and its successor rules are bad in law. That is to say even when the manufacturer of the goods is the job worker, the liability to pay duty can be on another. This position becomes very clear if the definition of assessee and the Rules prescribing who has to pay duty are scrutinized. Rule 7AA was for making a deviation, for textile goods, from the general rule that manufacturer has to pay duty. 6. The only provision that needs to be referred to is Notification No. 7/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same for the completion of the manufacturing process in his factory. Rule 4(1) and Rule 4(3) of the Central Excise Rules 2001 and 2002: Duty payable on removal.- (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided: Provided that the goods falling under Chapter 61 or 62 of the First Schedule to the Tariff Act, produced or manufactured by a job worker may be removed without payment of duty leviable thereon and the duty of excise leviable on such goods shall be paid by the person referred to in sub-rule (3), as if such goods have been produced or manufactured by him, on the date of removal of such goods from his premises registered under rule 9. Explanation .- It is hereby clarified that where such person has authorised the job worker to pay the duty leviable on such goods under sub-rule (3), such duty shall be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay duty. This is to say that there is no ruling that a Rules like Rule 7AA and its successor rules are bad in law. That is to say even when the manufacturer of the goods is the job worker, the liability to pay duty can be on another. This position becomes very clear if the definition of assessee and the Rules prescribing who has to pay duty are scrutinized. Rule 7AA was for making a deviation, for textile goods, from the general rule that manufacturer has to pay duty. The position becomes clear when Rule 4 of Central Excise Rule as it existed prior to 25-3-2000 (After 25-03-03 similar provisions were incorporated as a new rule 12B), is examined. 28. This rule does not state that for textile items job worker is not the manufacturer. It only says that the duty is to be paid by the person supplying the material as if he is the manufacturer So we are of the view that the Appellant had no obligation to pay excise duty on garments stitched out of fabrics bought or brought by the customers. Thus, the argument that in the case of textile goods got manufactured on job work basis during the period 2001-2004, the job worker has to discharge excise duty liability is not acceptable. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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