TMI Blog2013 (9) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the job-worker which can be sold by him – Following GENERAL ENGINEERING WORKS Versus COMMR. OF C. EX., JAIPUR [2005 (3) TMI 16 - SUPREME COURT OF INDIA]. Revenue Neutrality – Held that:- The job-worker and the principal-manufacturer were separate, distinct and different legal entities and, therefore, mere availability of credit to the principal-manufacturer cannot be said to have led to a revenue neutral situation - The principal-manufacturer can take the credit of the duty paid by the job-worker, such an argument was devoid of merits - Revenue neutrality situation will arise only if the job-working unit and the principal manufacturing unit belong to the same organization. Jay Yuhshin Ltd. v. Commissioner of Central Excise, New Delhi [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI ] - revenue neutrality being a question of fact, the same had to be established in the facts of each case and not merely by showing the availability of an alternative scheme - where the scheme opted for by the assessee was found to have been misused, the existence of an alternate scheme would not be an acceptable defence and with particular reference to MODVAT scheme it had to be shown t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back to the Tribunal for reconsideration. This is in view of the fact that prima facie it would appear that the Bangalore Bench of the Tribunal has taken a view which would have a material bearing on the issue involved, in P.R. Rolling Mills Pvt. Ltd. (supra). The Tribunal ought to have considered the impact of the judgment of the Supreme Court in International Auto Ltd. (supra) which was cited before it. In this view of the matter and without expressing any opinion on the merits of the question as to whether a prima facie case has been made out, we set aside the impugned order of the Tribunal and remand the proceedings for a fresh determination. In view of the order of remand, it is not necessary for the Court to answer the questions of law as framed. It is in pursuance of the directions of the Hon ble Bombay High Court, the matters are being taken up for consideration. 3. The learned advocate for the appellant submits that in the case of P.R. Rolling Mills Pvt. Ltd. v. Commissioner of Central Excise, Tirupathi reported in 2010 (249) E.L.T. 232 (Tri.-Bang.) while considering a similar matter the Hon ble Tribunal held that : If the intermediary products are not liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete waiver of pre-deposit of the dues adjudged. Lastly, the learned counsel argues that no suppression can be alleged in the instant cases on the part of the appellants inasmuch as there were contradictory views about the inclusion/exclusion of the cost of the scrap in the value of the intermediate products manufactured and supplied on job-work basis and, therefore, extended period of limitation could not be invoked to confirm the duty demands. He further submits that inasmuch as the final product producer is entitled for taking CENVAT credit of the duty paid by the job-workers, the situation is Revenue neutral and on these account also, the duty demands are not sustainable. 4. The learned AR appearing for the Revenue, on the other hand, relies on the judgment of the Hon ble Apex Court in the case of General Engineering Works v. Commissioner of Central Excise, Jaipur reported in 2007 (212) E.L.T. 295 (S.C.) wherein the Hon ble Apex Court held that scrap generated out of the raw material supplied by the principal manufacturer and retained by the appellant and sold by the appellant will have a bearing on the job-work charges realised by the appellant and being an additional c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided for supply of goods without payment of duty on the job-worked product, the question of inclusion of the value of inputs received from the principal-manufacturer does not arise inasmuch as the job worker had not taken credit of the duties paid on such inputs received from the principal-manufacturer. Similarly, in the case of P.R. Rolling Mills Pvt. Ltd. s case, decided by the Bangalore Bench of the Tribunal, there also the appellant-job worker was undertaking the job-work as per the provisions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 which provided for receipt of inputs or partly processed inputs from the principal-manufacturer, undertaking job-work on the same and returning the same to the principal-manufacturer without payment of duty. In that context, following the decision of the Hon ble Apex Court in the case of International Auto Limited, this Tribunal decided that the question of valuation of intermediate products produced on job-work basis and supplied to the principal-manufacturer did not arise as no payment of duty was involved under the procedure prescribed under Rule 4(5)(a) of the CENVAT Credit Rules, 2004. 6.2 In the case under consideration, the job- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the principal-manufacturer and the job-worker to take into account the value of the scrap that will be retained by the job-worker which can be sold by him. Therefore, such retention of scrap by the job-worker has an inherent depressing effect on the conversion charges negotiated between the principal-manufacturer and job-worker and therefore, following the ratio of the judgment of the Hon ble Apex Court in the cases cited supra, such scrap value is liable to be added in the value of the job-worked product which has been returned to the principal-manufacturer on payment of duty. Therefore, we are of the view that the decisions of the Hon ble Apex Court and this Tribunal in the case of International Auto Limited and P.R. Rolling Mills Pvt. Ltd. have no application to the facts of the case before us and the ratio of the decisions of the Hon ble Apex Court in the cases of General Engineering Works and Lloyds Steel Industries have a direct bearing on the facts of this case, as they are identical. Therefore, we are of the view that the appellants have not made out a case for complete waiver of the pre-deposit of the dues adjudged in the instant case. 6.5 As regards the contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
