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TMI Blog2007 (10) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants are liable to discharge duty on the goods manufactured for M/s. Kudva Plastisac and M/s. Vishnu Synpac. Further the appellants were availing of the benefit of Notification No. 9/2002. According to the Revenue, the clearances of the goods meant for M/s. Vishnu Synpac and M/s. Kudva Plastisac had not been included in the aggregate value of the clearances by the appellant. Once these values are included it was contended that they would not be entitled for the benefit of the small-scale exemption for 2001-2003. The Revenue issued show cause notice on the basis of the investigation and the Adjudicating Authority passed the impugned order. 3. The Adjudication authority confirmed a demand of Rs. 42,57,602/-, which represents the duty on the goods manufactured by the appellants as job work for M/s. Kudva Plastisac and M/s. Vishnu Synpac. The confirmation has been done on the ground that the principal manufacturers had not filed the declaration required under Notification No. 83/94, therefore, they are not entitled for the benefit of the notification. Further it has been held that the appellants who are the job workers and the other two units who sent the raw materials for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; Circular No. 306/22/97-CX., dated 20-3-1997 Modvat credit - Inputs used by job workers in job working contracts Circular No. 306/22197-CX., dated 20-3-1997 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on the goods? If we go by the show cause notice issued to the appellants and also the impugned order, we find that the department holds that the job worker is the manufacturer and the job worker has the liability to pay excise duty. On theground that the two principal manufacturers and the worker namely the appellant have their dealings only on principal-to-principal basis, taking shelter of a circular issued by the Board, the Adjudicating Authority has come to the conclusion that in the present case the job worker is the manufacturer and therefore, they are liable to pay duty. 5.2 Moreover, Revenue has also invoked Notification No. 83/94 which is very relevant in respect of the job work. This Notification provides exemption to goods specified in the SSI exemption Notification which are issued from time to time. If a principal manufacturer sends raw materials to the job worker and the goods are returned to the principal manufacturer, he can avail exemption on the goods manufactured by a job worker. For clarity we reproducing the said Notification: &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure or finishing of an article or any operation which is essential for the aforesaid process, and the expression job worker' shall be construed accordingly. 5.3 A very careful reading of the Notification reveals that when goods are sent for job work and the job worker completes the manufacturing processes, then such goods are entitled for exemption from duty on certain conditions. What are the conditions? The first condition is (a). In terms of the condition (a), the specified goods received from the job worker shall be used in the factory of the supplier of the raw materials. That means if a principal manufacturer, or raw material supplier sends the raw materials to a job worker and receives such finished products, then first condition is that he should use these goods in his factory. That is condition no. 1. The second condition is (b) in case the goods are not returned to the principal manufacturer or the supplier and if they are sold on his account, then the principal manufacturer undertakes to pay excise duty, if any, payable on such goods but for the exemption contained in this Notification as if such goods were manufactured by the said supplier and sold on his account. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is on record that they had manufactured the goods on job work basis and sent the same to the principal manufacturer. In this connection, we had gone through the agreement between the appellant and the two raw material suppliers. Nowhere in the agreement, it is stated that the job worker will be clearing the goods on payment of duty. In our view, there is no justification for extending the longer period, because the period of dispute is from 1-4-2001 to 31-3-2003. The officers visited the unit and carried out search operations on 26-3-2003. However, the show cause notice was issued only on 30-6-2005. There is an enormous delay. Of course, the longer period can be invoked, provided there is suppression of facts with an intention to evade duty. In this case, the appellants have submitted periodical declarations. They have been availing SSI exemption. The audit parties also have visited them several times. So in these circumstances, we cannot accept that they had suppressed the facts with an intention to evade duty. So the longer period is not applicable. 5.7 The finding of the learned authority that the relation between the appellant and raw material supplier is on principal-to-p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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