TMI Blog2014 (9) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... ital goods. It does not impose any condition that the raw materials also should be supplied by the assessee along with the moulds and dies. So long as the permission is granted by the Commissioner for removal of moulds and dies without payment of duty to the job worker, the question of deeming it as an improper clearance does not arise. Decision in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in [1994 (7) TMI 157 - CEGAT, NEW DELHI] as had been already extracted supra, the emphasis laid by the Supreme Court is that the Explanation appended to notification on the expression 'job worker' is in relation to the said notification and not otherwise. It, therefore, means, that the term 'job worker' in respect of one notification and the term 'job worker' in relation to Rule 57S(8) should be understood in the context of the provisions of the Modvat Rules. The provisions of Rule 57S(8) clearly mandates that consequent on the permission of the competent authority, moulds and dies should be removed, without payment of duty, to 'job worker'. If such condition has been complied with by the assessee, the Department cannot import any other meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials are supplied to, is correct in law? (ii) The assessee avails credit of duty involved on mould and dies and clear them to the consignee for manufacture of parts of washing machines without payment of duty. The consignee sends back the duty paid parts manufactured to the assessee, which already includes the amortized value of the moulds and dies, involved for the manufacture. Thus, there is double Modvat benefit to the assesee, which is violative of CENVAT/MODVAT provisions. Is it correct in law to allow double Modvat benefit to the assessee? C.M.A.Nos.2877 3544 of 2005: i) Whether the Tribunal's finding that it is not necessary for the purpose of sub Rule (8) of Rule 57S of Central Excise Rules, 1944 that only those person will be termed as job worker to whom the raw materials are supplied to, is correct in law? ii) Whether the ruling of Honourable Supreme Court in the case of Prestige (India) Ltd., Vs. Commissioner of Central Excise, (1994 73 ELT 497 SC), that where the raw material is not supplied by the customer, there is no question of such manufacturer being termed as job worker, will not be applicable for the interpretation of sub rule 8 of Rule 57 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this event had not happened and therefore there is a violation of the provisions of the erstwhile Modvat Rules. Accordingly, show cause notice was issued to the assessee in respect of four different periods. The assessee submitted their objection to such demand contending that under Rule 57S(8) of Modvat Credit Rules, (hereinafter referred to as 'Rules') proper permission has been obtained from the jurisdiction Commissioner and there is no need for reversal of credit availed in respect of moulds and dies in a case of transfer of goods under Rule 57S(8) of the Rules to a job worker. 3. The Original Authority relied upon the decision of the Supreme Court in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365 to hold that where the raw material is not supplied by the customer, there is no question of the person manufacturing goods for the customer being termed as 'job worker'. The Original Authority held that the consignee or the person to whom the moulds and dies were sent for manufacture of parts of washing machine cannot be considered as a job worker and in this case, the duty liability is discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials are supplied to. Thus, following the ratio of these decisions, we set aside the impugned order and allow all the appeals. 5. Aggrieved by the order of the Tribunal, the Revenue has filed the present Civil Miscellaneous Appeals. 6. Learned Standing Counsel appearing for the Revenue submits the provisions under Rule 57S(8) of the Rules would not apply to the case of the assessee, as the raw materials were not supplied by the assessee to the job worker and the job worker purchased the raw materials from independent source and using the moulds and dies supplied by the assessee, they manufactured and supplied the parts of the washing machine to the assessee. He further submits that the Supreme Court in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365 held that job work means goods produced out of materials supplied by the customer and the job worker contributes mainly their labour and skill though done with the help of own tools, gadgets or machinery. This ratio was overlooked by the Tribunal. Hence, the order of the Tribunal has to be set aside. 7. Per contra, learned counsel appearing for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Rules, 1944. The said Notification reads as follows: NOTIFICATION Exemption to goods produced on the job work basis :- In exercise of the powers conferred by Sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods falling under Item No. 68, of the First Schedule to the Central Excise and Salt Act, 1944 (1 of 1944), manufactured in a factory as a job work from so much of the duty of excise leviable thereon as is excess of the duty calculated on the basis of the amount charged for the job work. Explanation:- For the purposes of this notification, the expression 'job work' shall mean such items of work where an article intended to undergo manufacturing process is supplied to the job worker and that article is returned by the job worker to the supplier, after the article has undergone the intended manufacturing process, on charging only for the job work done by him. 12. In that case, the appellant - Prestige Engineering (India) Ltd. had entered into an agreement with M/s.Modipon Limited, where M/s.Modipon was to supply steel pipes from which the appellant- Prestige Engineering (India) Ltd. was to manufacture cops, fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the article which would have been the case but for the Notification. According to the restricted view contended for by the Revenue, a tailoring factory stitching clothes out of the cloth supplied or a factory preparing shoes out of material supplied by the customer, in the illustrations given hereinabove, would not qualify for the benefit of the Notification. 14. On facts, the Supreme Court came to the conclusion that the rings and adapters were not supplied by M/s.Modipon. Except the pipes, all other items which go into the manufacture of cops were either purchased or procured by the appellant himself and he manufactures the cops out of them. Hence, the work done by the appellant could not be be characterised as a job-work. If all the requisite rings, adopters and sleeves had also been supplied by M/s.Modipon, it could probably have been said that the appellant's work was in the nature of job-work. Therefore, while strictly interpreting the exemption Notification No.119/75, the Supreme Court held that unless the raw materials were supplied, it will not come within the definition of 'job work'. As a result, the job workers were liable to pay duty on the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf and according to his specifications. 19. We find that the above-said provision makes it clear that the removal of moulds and dies without payment of duty is in relation to only moulds and dies and not with respect of any other capital goods. It does not impose any condition that the raw materials also should be supplied by the assessee along with the moulds and dies. So long as the permission is granted by the Commissioner for removal of moulds and dies without payment of duty to the job worker, the question of deeming it as an improper clearance does not arise. 20. The Tribunal, in paragraph No.4 of its order, has relied upon the earlier decision in the case of Monica Electronics vs Cce reported in 2000 (123) ELT 1047, which was subsequently followed in the case of Anusika Autolite Ltd., V. CCE, Jaipur reported in 2002 (53) RLT 186 (CEGAT - Del.). In the case of Monica Electronics vs Cce reported in 2000 (123) ELT 1047, while interpreting clause (8) of Rule 57S, the Tribunal laid emphasis on the non-obstante clause and held that the expression 'job worker' in relation to Exemption Notification No.214 of 1986 similar to that of Notification No.119 of 1975 as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is force in the contention of the ld. counsel that any interpretation of 'job worker' in Sub-rules (8) to (10) of Rule 57S as having the same meaning it has in the Exemption Notifications will distort the said provisions and make it unworkable. We also find that the decisions relied on by the Commissioner do not deal with the question of applicability of definition of 'job worker' in other Notifications to provisions of Rule 57S(8). 21. We find the distinction made by the Tribunal, on facts, as against the decision in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365, is justified as we find that the decision in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365 as had been already extracted supra, the emphasis laid by the Supreme Court is that the Explanation appended to notification on the expression 'job worker' is in relation to the said notification and not otherwise. It, therefore, means, that the term 'job worker' in respect of one notification and the term 'job worker' in relation to Rule 57S(8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was, therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. [2001 (130) E.L.T. 193] cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary. 23. In the present case, we find that when the Department having accepted the decision in the case of Monica Electronics vs Cce reported in 2000 (123) ELT 1047 without demur, in the present case, on the same set facts, they are not entitled to agitate the same issue with regard to the assessee's claim of removal of moulds and dies without payment of duty following the procedure prescribed under Rule 57S(8) of the Rules. 24. As far as the issue on double Modvat benefit is concerned, the Revenue has not raised the issue before the first Appellate Authority or before the Tribunal. Therefore, there is no justification for the Revenue to raise the plea afresh at the first inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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