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2016 (6) TMI 467

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..... ied by the principle manufacturer need not to be added or same should not be levied with excise duty. The issue in the present case is squarely covered by the judgment of Hon’ble Supreme Court in case of International Auto Ltd Vs. CCE [2005 (3) TMI 132 - SUPREME COURT OF INDIA]. Therefore, by following the same the appellant are not required to pay duty on the machine body supplied by the principle manufacturer therefore the impugned order is not sustainable. Also the penalty imposed on the appellant is set aside. - Decided in favour of appellant - Appeal No. E/190/11, E/1201/11 - Order No.A/87348-87349/16/SMB - Dated:- 11-1-2016 - Mr Ramesh Nair, Member(Judicial) And Mr. Raju, Member (Technical) Shri. J. N. Tiwari, Advocate for t .....

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..... ds. The adjudicating authority confirmed the demands and imposed penalties and the same were upheld by the Commissioner (Appeals) vide the impugned order dated 4/5/2011 and 7/12/2010 therefore the appellants are before us. 3. Shri. J.N. Tiwari, Ld Counsel for the appellant submits that the appellant is manufacturer of rubber product, on which they are paying excise duty. In the present case they have not only paid the excise duty on the rubber product manufactured by them but also on the job work charges. As regard the inclusion of value of valve bodies, he submits that valve bodies were received by the appellant under job work challan in terms of Rule 57F(3) of the Central Excise Rules, 1944 and Rule 4(5)(a) of Cenvat Credit Rules, 2004 .....

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..... y the principle manufacturer under job work provision as laid down under Rule 57F(3) of the Central Excise Rules, 1944 and Rule 4(5)(a) of Cenvat Credit Rules, 2004. In our view the rubber product which is manufactured by the appellant are only dutiable manufacturing activity of the appellant. They are correctly discharging the duty on such rubber product. As regard the dispute raised by the Revenue that the value of machines body supplied by the principle should be added in the assessable value of the job work goods, we are of the view that activity over and above of manufacture of rubber product i.e. rubber bonding in the machine body is purely job work activity. It is undisputed fact that machine bodies are supplied by the principle unde .....

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..... nefit of the Modvat scheme at the time of clearance of such final product. The manufacturer of the final product, in this case TELCO, would therefore, be entitled not only to adjust the credit on the inputs supplied by it to the intermediate purchaser such as the appellant but also to the credit for the duty paid by the intermediate purchaser on its products. The reliance on the decision in Burn Standard Company Ltd. (supra) by the Tribunal was misplaced. That case has no doubt held that the value of the free inputs were to be included in the final product. In that case, the final product was wagons and the question was whether the items which were supplied free by the Railway Board to the assessee could be included in the value of the wago .....

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