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M/s. Amritlal Chemaux Pvt. Ltd. Versus Commissioner of Central Excise, Thane-I

2015 (11) TMI 367 - CESTAT MUMBAI

Denial of refund claim - Reversal of CENVAT Credit - Non maintenance of separate accounts - exemption from payment of duty at job workers(Appellant) but in terms of Notification 214/86CE - Held that:- Goods which are cleared without payment of duty and on the payment of 8% under Rule 57-CC is manufactured as job work goods under Rule 57F (3) and under exemption notification No. 214/86 therefore Cenvat credit is not deniable on the input used in the manufacture of job work goods at the job worker .....

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under Notification 214/86-CE dated 25/3/1986, neither Cenvat Credit can be denied nor demand under Rule 57 CC can be made. - impugned order is set aside - Decided in favour of assessee. - APPEAL NO. E/811/10 - Dated:- 4-6-2015 - Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri. N. S. Patel, Advocate For the Respondent : Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) ORDER Per : Ramesh Nair This appeal is directed against Order-in- Appeal No. SB/23/Th-I/10 dtd. 10/2/2010 passed by the .....

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lant had paid Central Excise duty of ₹ 1,52,410/- under rule 57 CC of Central Excise Rules 1944 @ 8% of value of goods cleared at NIL rate of the duty on which job work was carried out under Rule 57(3). The appellant in their own claim stated that they have not reversed the cenvat credit of ₹ 50,758/- in respect of their own raw material i.e. Ethylene Oxide used in the manufacture of IP 534(exempted product) and therefore had requested for refund of differential duty of ₹ 1,01, .....

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mitted break up of labour charges also agree for deduction of ₹ 624/- from their reduced claim of ₹ 1,01,652/-being LDO used in the manufacture of IP 534 and thus had reduced the claim to 1,01,028/-. The Asstt. Commissioner vide order-in-original No. 12/97dated 26/2/1998 rejected the refund claim on the ground that the appellant have availed Cenvat Credit in respect of their own input in the processing job work goods which is exempted and appellant have not maintained separate accoun .....

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nt in the caseof Max India Ltd. (Maxmet Division) Vs. Commissioner of Central Excise, Jalandhar [2006 (197) ELT 376 (Tri-Del)]. On the remand of the matter, the appellant made representation for finalizing their refund claim of ₹ 1,52,410/- before the adjudicating authority. Asstt. Commissioner vide the order-in-original passed denovo order bearing no. DP/Refund-1/18-1/0809 dated 29/7/08 wherein once again rejected the refund claim of ₹ 1,52,410/-holding that the judgment relied upon .....

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erstwhile Rule 57(F3) of Central Excise Rules 1995. Job work goods were cleared under Notification No. 214/86CE dated 25/3/1986. Though the job work goods is exempted from payment of duty at job workers(Appellant) but in terms of Notification 214/86CE principal is discharging the excise duty on the final product where either the job work goods is used as intermediate goods or job work goods were cleared as such on payment of duty. Therefore in this particular case, the Rule 57 CC and payment of .....

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indings of the impugned order. He further submits that Rule 57 CC does not distinct the exemption under notification 214/86-C.E. and other exemption, therefore for any reason if the goods are exempted, assessee in terms of Rule 57-CC required to pay 8% of the value of the exempted goods, therefore the Ld. Commissioner(Appeals) rightly rejected the appeal of the appellant. In support of his submission, he placed reliance on following judgments; (a) Commissioner of C. Ex. Nagpur Vs. Ballarpur Indu .....

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of 8% under Rule 57-CC is manufactured as job work goods under Rule 57F (3) and under exemption notification No. 214/86 therefore Cenvat credit is not deniable on the input used in the manufacture of job work goods at the job workers end. Though it is covered by Notification No. 214/86 but it is not exempted from payment of excise duty whereas it only temporary defers the excise duty liability for the reason that as per the condition of notification No. 214/86 principal is required to pay exci .....

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t judgment in the CC, Ex, Thane-I Vs. Nicholas Piramal (I) Ltd. which is not on the issue that Rule 57 CC is applicable in case of removal of job work goods under Notification 214/86, therefore ratio of the said judgment was not applicable and Commissioner has wrongly applied the same. In case of Max India Ltd this Tribunal has held as under: 6. The appellants are manufacturing metallised films? and clearing the same on payment of duty and also undertaking the job-work of metallising films on th .....

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ble. The appellants are working under this Notification regarding which the necessary declaration is filed by the principal manufacturer. The Revenue confirmed the demand on the ground that the appellants were clearing the goods without payment of duty on which credit has been taken under Rule 6(3)(b) of the Cenvat Credit Rules. This Rule provides that the manufacturer is liable to pay amount equal to 8% of the exempted final products charged by the manufacturer for the sale of such goods. The c .....

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he appellant relies upon the decision of this Tribunal in Ballarpur Industries v. CCE - 2001 (138) E.L.T. 94 (T) = 2002 (48) R.L.T. 221. The departmental representative relies heavily on what the Commissioner has said. The ratio of the decision in Ballarpur Industries is that in cases where the exempted final product is not sold, the provisions of sub-rule (1) of Rule 57CC will not apply because that cannot be given effect to; the rule requires the manufacturer to pay 8% of the price charged by .....

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e 57CC of Cenvat Excise Rules and while interpreting the earlier rules, the Tribunal held that where the exempted final products are not sold, the manufacturer is not liable to pay 8% of the price charged by him under Rule 57CC of Cenvat Excise Rules. In view of the above decision of the Tribunal and the goods manufactured on job-work basis and were cleared under the Notification No. 214/86-CE, it cannot be said that the appellants, who is a job worker, sold the goods to the principal manufactur .....

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nder Rule. In the case of Jalpack India Ltd.(supra), the Tribunal set aside the demand raised on the similar ground where the credit taken by the appellants on the inputs used in the manufacture of exempted job work goods were reversed at the time of clearance. In view of the decision of the Tribunal, the Revenue is not disputing the fact that the intermediate products manufactured by the appellants are further used in the manufacture of pouches, which were cleared without payment of duty. There .....

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8) R.L.T. 221. The departmental representative relies heavily on what the Commissioner has said. The ratio of the decision in Ballarpur Industries is that in cases where the exempted final product is not sold, the provisions of sub-rule (1) of Rule 57CC will not apply because that cannot be given effect to; the rule requires the manufacturer to pay 8% of the price charged by him for the sale of such goods. Although this decision was not cited before the Commissioner, the specific point which for .....

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