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Shridhar Metal Versus Commissioner of Central Excise & Service Tax, Aurangabad

2015 (10) TMI 1565 - CESTAT MUMBAI

Duty demand - Manufacture - Job works within the premises of principal - Demand notices were issued to the appellants demanding Central Excise duty on the ingots manufactured by them on the grounds that the appellant's are manufacturers in their own right and should have obtained separate registration - Held that:- In the very same facts of the impugned case the tribunal has already held that the same activities are entitled to be treated as that of a job worker. The said decision of tribunal [2 .....

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. - 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 Electricals Limited (AEL). AEL is using various aluminium products for manufacture of its final products. During the Manufacturing process some quantity of alum .....

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gistration. It was alleged that it is immaterial that the appellant or operating within the premises of AEL. 3. The learned Counsel for the appellant pointed out that a demand notice was issued to AEL, as well, demanding duty on the aluminium dross, aluminium turning and aluminium oily flash cleared by AEL to the appellant. The said demand notice was also adjudicated and confirmed by the Commissioner. In the appeal file by AEL against the said order of the Commissioner the Tribunal has already d .....

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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 consump .....

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pur-II [2015(315) E.L.T. 86(Tri-Del.) 6. The appellant had got the zinc and lead electrodes fabricated through job workers in their own premises out of the raw materials and design supplied by them. Though the job worker had brought their own machinery and appliances and their own workers, the job had been done in the appellants premises and under the appellants supervision. It is seen that in terms of the appellants contract with their job workers, the job workers were to pay the minimum wages .....

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the Factories Act. The Commissioner on the basis of the above clauses 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 departme .....

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ase, we hold that it is the job workers who have to be treated as the manufacturers and, therefore, the duty on Aluminium and lead electrodes got manufactured by them on job work basis cannot be demanded from the appellant by treating them as manufacturers. The impugned orders are set aside. The appeals are allowed. In view of the above judgment of coordinate bench of this Tribunal it is settled that if job worker is doing job work within the factory premises of the principal with his own capita .....

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of remnant material by the appellant to M/s. Shridhar Metal Works is not treated as captive consumption and it is home consumption, whether appellant is required to pay duty on such removal. We are of the view that the removal of remnant material to M/s. Shridhar Metal Works is not sale/purchase transactions but it 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 alumini .....

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arely meant for use for further production of dutiable goods is in the nature input/partial processed inputs. Therefore removal of such remnant material can be statutorily made in terms of Rule 4(5)(a) of Cenvat Credit Rules, 2004 which is reproduced below: 4. Conditions for allowing CENVAT credit. (5) (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-condition .....

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manufacturer or provider of output service shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the CENVAT credit or otherwise, but the manufacturer or provider of output service can take the CENVAT credit again when the inputs or capital goods are received back in his factory or in the premises of the provider of output service From the above provision, assessee is permitted to remove the inputs for job work. We further note that similar pr .....

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nput 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 (a) of Central Excise Rules, 2002 and Notification No. 214/86 -CE it indicates that intention of the legislator is that if the input whether as such, or partially processed or after processing by the job worker f .....

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the motor vehicle parts which are cleared on payment of duty. In this chain the remnant is an intermediate input therefore movement of such input undoubtedly covered under Rule, 4(5)(a) of Cenvat Credit Rules, 2004 and Rule 16(a) of Cenvat Credit Rules, 2002. Therefore no duty can be demanded on the removal of such remnant material for job work. Thereafter the Tribunal relying on the following Decisions: 1 WYETH LABORATORIES LTD.Vs.CCE, Bombay - 2000 (120) E.L.T. 218 (Tribunal - LB) 2 SHAKTI WI .....

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