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2016 (6) TMI 828 - CESTAT NEW DELHI

2016 (6) TMI 828 - CESTAT NEW DELHI - TMI - Cenvat Credit - duty paid by the Job worker - inputs which were transferred to the job worker without reversal of such credit - The case of the Revenue is that the appellants have availed credit on same inputs twice - first as duty paid on “inputs” when initially purchased and second time as duty paid on “processed goods” from the job worker. - Held that:- The issue came up only because the jurisdictional officers at the job worker's end held that job .....

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(JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri Vivek Kohli, Advocate For the Respondent : Ms. Neha Garg, DR ORDER PER B. RAVICHANDRAN: The appeal is against order dated 27.02.2009 of Commissioner of Central Excise Delhi II. The appellants are engaged in the manufacture of flavors / perfumery compound liable to central excise duty. They were availing cenvat credit on various inputs in terms of Cenvat Credit Rules 2004. After availing the credit these inputs wer .....

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ufactures the finished goods and clear the same on payment of duty. The job worker falls under Central Excise Commissionerate, Noida. The jurisdictional officer raised certain dispute regarding non payment of duty by the job worker and the proceedings resulted in confirmation of demand on the goods processed / manufactured by the job worker for the appellant. The job worker issued supplementary invoices to the appellant after the payment of duty as demanded by the jurisdictional officer on the g .....

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concluded in the impugned order wherein the Commissioner held that the Cenvat Credit taken by the appellant on the goods supplied free of cost to the job worker during the period February 2005 to January 2006 amounting to ₹ 3,73,42,925/- is not available to the appellant. The amount is ordered to be recovered along with penalty of equivalent amount. 2. The Ld. Counsel for the appellant submitted that they have been clearing the duty paid inputs in terms of Rule 4(5)(a) of Cenvat Credit Ru .....

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oods returned back to the appellants in terms of an approved procedure. 3. Since such payment of duty has been ordered to be made on the processed goods, the job worker paid the said duty after arriving at a value in terms of the order of Honble Supreme Court in the case of Ujjagar Paints-1989 (38) ELT 535 (SC). It is not correct for the Revenue to allege that they have taken credit twice on the same inputs. The credit taken for the first time was on the purchased inputs which were transferred .....

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ally based on the duty discharged by the appellant and there is no allegation that any credit has been taken on the inputs or processed goods which have not suffered duty. He relied on the Tribunal s decision in the case of Bharat Heavy Electricals Ltd. Vs. CCE Meerut-2014 (300) ELT 422 (Tri-Del), Southern Lubrication Pvt. Ltd. Vs. CCE Bangalore-2013 (295) ELT 598 (Tri-Bang.) and Thermax Ltd. Vs. CCE Vadodara-2015 (326) ELT 369 (Tri-Amd). Finally, he submitted that whole exercise is revenue neut .....

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der and stated that when the jurisdictional authority at the job workers end held that job worker is not eligible for concession under notification 214/86-CE, the appellant could not continue to avail the credit on inputs as such and also credit on processed goods received from job workers. 6. We have heard both the sides and examined the appeal records. 7. The short point for decision as to whether or not the appellants are right in availing the credit on the inputs before they were cleared to .....

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e concession under notification no. 214/86. This resulted in the payment of duty by the job worker on the processed goods cleared back to the appellant. The supplementary invoice was issued to pass on the duty so paid. The credit was availed by the appellant on these invoices. 8. We find the identical set of facts were subject matter of decision by this Tribunal in Bharat Heavy Electricals Ltd. (Supra). The relevant portion of the decision is reproduced for better appreciation: 6. The Appellant, .....

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as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning [or for the manufacture of intermediate goods necessary for the manufacture of final products] or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or provider of output service taking the Cenvat Credit that the goods are received back in the factory within one hundred and eight days of their be .....

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dit in respect of inputs, can send those inputs to his job worker for further processing, testing, repair, re-conditioning etc. or for manufacture of intermediate goods necessary for the manufacture of final products or for any other purpose, provided the processed inputs or intermediate products are returned back within a period of 180 days. There is no condition that for availing the facility of this Rule, the job worker should avail full duty exemption under Notification No.214/86-CE. There i .....

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any other inputs of their own used by the said job workers for manufacture of the intermediate products. The Department seeks to deny the Cenvat Credit of the duty on the intermediate product paid by the job-workers on the ground that on the same inputs, Cenvat Credit cannot be availed twice - first at the time of receipt the inputs by the Appellant in their factory from the input manufacturers and second time in respect of duty paid on intermediates goods made out of input supplied by Appellan .....

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y him on job work basis for the principal manufacturer, in terms of the judgment of the Apex Court in case of Ujagar Prints Vs. Union of India, reported in 1989(3) ELT-439 (SC), they would be required to pay duty on the cost of input plus job charges including the cost of their own inputs used in manufacture. This is what the job workers have done in the present case. Moreover when the inputs, in question, have suffered twice, first in the hand of input manufacturers from whom the Appellant had .....

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