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2015 (10) TMI 1565

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..... ob work. Since the ratio of the case is squarely applicable to the present case the appellants have to be treated as independent manufacturers doing jobwork for AEL. Since the clearance of aluminium waste is treated as clearance for jobwork the same treatment is to be given to the material manufactured and returned by appellants. As a result the demands can not be sustained. - Decided in favour of assessee. - APPEAL No. E/88586 & 88589/14 - - - Dated:- 4-9-2015 - Mr.Anil Choudhary, Member (Judicial) And Mr. Raju, Member (Technical) For the Petitioner : Shri.A.B.Nawal, Advocate For the Respondent : Shri.V.K.Agarwal, Addl. Comm. (AR) ORDER Per: Raju 1. The appellants are working within the premises of Aurangabad E .....

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..... der Notification No. 67/95 CE dated 16/3/1995, we observed that a part of the premises of the appellant was given on leave and licence agreement to different entity i.e. M/s. Shridhar Metal Works who is unrelated to the appellant therefore in our view the premises which is used by M/s. Shridhar Metal Works is out side premises of the appellant. Secondly M/s. Shridhar Metal Works is an independent entity who carried out job work on the material supplied by the appellant in such situation M/s. Shridhar Metal Works has independent manufacturer of aluminium ingots therefore removal of remnant material to M/s. Shridhar Metal Works cannot be treated as captive consumption and therefore the same shall not be entitled for exemption under Notificati .....

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..... of the Contract and also the provision in the contract, requiring the job workers to work round the clock, has inferred that the job workers are merely hired labourers of the appellant. In our view, this conclusion of the Commissioner is totally wrong, as from the above clauses of the contract, it cannot be inferred that the job workers were merely hired labourers of the appellant. Moreover, it is not disputed by the department, that in respcct of the identical contracts of the appellants Visakhapattanam unit with its job workers for identical work, the Chennai Bench of the Tribunal vide judgement reported in 2005 (188) E.L.T. 331 has held that the job workers role was much more than mere receiving wages for labour involved in manufacture .....

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..... t is on job work basis. This fact is not under dispute that owner ship of remnant material remains with appellant and M/s. Shridhar Metal Works has carried out process of making aluminium ingots is on behalf of the appellant and M/s. Shridhar Metal Works paying only processing charges/labour charges, therefore in this fact, transactions is of job work. It is also fact that remnant material after conversion into aluminium ingots, the ingots is used in the manufacture of motor vehicle parts by the appellant which are admittedly cleared on payment of duty. Remnant is generated during the manufacture of motor vehicle part out of the cenvatable inputs therefore remnant which is squarely meant for use for further production of dutiable goods is i .....

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..... Excise Rules, 2002 which is reproduced below: Removal of goods for job work, etc. RULE [16A. Any inputs received in a factory may be removed as such or after being partially processed to a job worker for further processing, testing, repair, re-conditioning or any other purpose subject to the fulfillment of conditions specified in this behalf by the Commissioner of Central Excise having jurisdiction.] From the above rule also it is permitted that input can be removed for job work. Even in the job work if the resultant product is returned and used in the manufacture of dutiable goods the said job work is not liable for duty, in terms of notification 214/86-CE dated 25/3/1986. It is observed that in view of Rule 4(5)(a) and Rule 16 .....

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..... bove judgments, it is well settled that the waste generated during the course of manufacture of final product, can be sent without payment of duty for melting to the job worker and thereafter the same is used for manufacture of dutiable goods. In view of our discussion which is based upon various judgments discussed above we are of the considered view that the removal of remnant by appellant to the job worker is not liable to duty and the adjudicating authority has wrongly confirmed the duty demand and imposed penalties. Since, we have taken view that the removal of remnant is not dutiable, we are not going into aspect of excisability of said remnant material with reference to judgments in case of Indian Aluminium Co. Ltd and Hindalco Indus .....

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