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TMI Blog2013 (4) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the statement, it was found that the main appellant herein had contravened the provisions of Central Excise Act and Rules made thereunder inasmuch as they did not pay the Excise duty of the goods which were cleared from the factory premises to the tune of Rs. 53,438/- and recovered the amount in cash from their buyers and they availed the CENVAT Credit on capital goods, which was otherwise not available to them as on the date of receipt of the goods, the manufacturing process and the manufactured product were not excisable goods. Based upon such a conclusion, a Show Cause Notice was issued to the appellant. The appellant-company and other two appellants contested the Show Cause Notice on the merits of the case as well as on limitation. The adjudicating authority did not agree with the contentions raised by the appellant and confirmed the demand and imposed penalty on the appellant company and also imposed personal penalties on the individuals. 3. Ld. Counsel appearing on behalf of all the 3 appellants submit that the appellants are not seriously contesting the demand of Rs. 53,438/- due to smallness of the amount. However, they pray for setting aside the penalty imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is his submission that the Larger Bench has settled the law that the goods which are cleared on job work basis and if the same are utilized by the principal manufacturer and manufactured further goods on which the Excise duty is discharged, it cannot be said that the goods manufactured on job work basis are exempted goods. He would submit that Hon'ble High Court of Bombay in the appeal filed by the Revenue in the case of Sterlite Industries (I) Ltd. - 2009 (244) E.L.T. A89 (Bom.) upheld the decision. It is also his submission that the co-ordinate Bench of the Tribunal in the case of Patel Alloys Steel Pvt. Ltd. - 2011 (269) E.L.T. 398 (Tri.-Ahmd.), has held that the credit cannot be denied on capital goods to the assessee who is carrying out the process of job work under Notification No. 214/86-C.E. It is his submission that the adjudicating authority has not properly dealt this issue in the impugned order. It is his submission that the depreciation, though was claimed earlier by the appellant, subsequently the Income Tax Officer has added the same for the purpose of arriving at the Income Tax liability of the appellant which, in turn, would indicate that the appellant has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CENVAT credit of Excise duty paid on such capital goods till 30-4-2003 when their own final products became dutiable with effect from 1-4-2003. 7. As regards the demand of duty liability of an amount of Rs. 53,438/-, interest thereof, we find that the issue is regarding under-valuation and the appellants are not seriously contesting the said demand. Since the appellants are not seriously contesting the demand, the impugned order to that extent is upheld and the appeal filed by the appellant to that extent is rejected. We hold that the appellant is liable for the duty of Rs. 53,438/- and interest thereof. As regards the penalty imposed on such an amount, we find that the penalty has been correctly imposed on the appellant as they did not discharge the duty liability during the relevant period. 8. As regards denial of CENVAT credit of the Central Excise duty paid on the capital goods, we find that the said capital goods were purchased during the period 1998-1999 to 2001-2002. It is also on record and undisputed that during the relevant period, the appellant was also availing CENVAT credit of inputs which were procured on payment of duty for the purpose of completing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CENVAT credit is allowed on the inputs which are used on such job work items, we do not find any valid reason to deny the CENVAT credit of Central Excise duty paid on capital goods, which were received by the appellant during the relevant period and used in the manufacturing of very same job worked goods. 9. We find strong force in the contentions raised by the ld. Counsel as to that the decision of the Larger Bench of the Tribunal in the case of Sterlite Industries (I) Ltd. (supra), has categorically settled the law as to that if an assessee is functioning under Notification No. 214/86-C.E. and if the ultimate principal manufacturer is discharging Central Excise duty liability after consumption of job worked goods, it has to be held that the said notification does not exempt the goods manufactured on job work by an assessee. The said ratio will fully cover the issue in favour of the assessee in this case, as regards the eligibility to CENVAT credit of the Central Excise duty on the capital goods, as it is undisputed that the appellant was using the said capital goods for manufacturing of his own product as well as the goods which were manufactured on job work basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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