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2016 (8) TMI 928 - CESTAT NEW DELHI

2016 (8) TMI 928 - CESTAT NEW DELHI - 2016 (341) E.L.T. 145 (Tri. - Del.) - Whether the appellant was acting as a job worker for its sister unit and doing the job work of converting Iron Ore into iron and ore concentrate slurry and returning the goods to the sister unit (Principal manufacturer) was required to pay duty thereon - Held that:- as far as the duty liability of a job worker in terms of Rule 57(F)(4) of Central Excise Rules, 1944 is concerned, it is settled upto the level of Supreme Co .....

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for further use in the manufacture of the final product or removing after payment of duty for home consumption or removing the same without payment of duty for export while Rule 4(5)(a) does not say so expressly though it is implicit therein. Thus, we are of the view that for the purpose of dutibility at the hands of the job worker, the provisions of Rule 57(F)(4) are essentially parimateria the Provisions of Rule 4(5)(a) of the Cenvat Credit Rules. - Decided in favour of appellant - E/2560/200 .....

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ty thereon. 2. Ld. Advocate for the appellant contends as under: (a). The appellant operated under the provisions of Rule 4(5)(a) of Cenvat Credit Rules inasmuch as the sister unit of the appellant based at Vishakhapatnam got it iron ore directly sent to the appellants unit under the provisions of said Cenvat Credit Rule and the appellant converted iron ore into iron ore concentrate and sent it back to the Vishakhapatnam Unit within a period of 180 days under proper challans showing receipt and .....

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dispute having been settled in favour of the appellant vide judgment of CESTAT in the case of Mukesh Industries Ltd. vs CCE, 2009 (248) ELT 203 (T.) and Dhana Singh Synthetics Pvt. Ltd. vs CCE, 2015 (326) ELT 609 (T). (e). Ld. Advocate also cited the Board s Circular No. 306/22/97-Cx dated 20/03/1997 based on which the judgment which was relied upon by CESTAT in the case of M Tex. & D.K. Processors Pvt. Ltd. vs. CCE, 2001 (136) ELT 73 (T) to arrive at finding that in terms of provisions of R .....

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bsence of any Exemption Notification, goods being manufactured by the appellant can only be cleared on payment of duty because the process of job work amounted to manufacture which is not in dispute and also not in dispute is the fact that the appellant was not eligible for the benefit of Notification No. 214/86-CE nor did it claim it. (c). Rule 4(5)(a) is only with regard to the cenvat credit and cannot be extended to interpret the duty liability of job worker. 4. We have considered the content .....

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aken by the appellant amounted to manufacture. Therefore, the contention of the Ld. DR that as the appellant engaged in the manufacture of goods it was required to pay duty in the absence of any exemption with regard thereto deserves to be carefully considered. In this regard, we find that Rule 4(5)(A) states as under: (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, .....

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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. As it will be convenient for the sake of further discussion, we also reproduce the provision of Rule 57(F)(4) of the erstwhile Central Excise Rules. 57(F)(4) - The inputs can also be remo .....

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thin a period of sixty days or such extended period as the Assistant Commissioner of Central Excise may allow in this behalf, for- (i) Further use in the manufacture of the final product; or (ii) Removing after payment of duty for home consumption; or (iii) Removing the same without payment of duty under bond for export. It is noted that Board s Circular dated 20.03.1997 while clarifying the issue of availability of Modvat Credit on input used by job worker observed as under: Instances have come .....

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ngly job worker is not eligible to avail credit in such cases. It is seen from the aforesaid circular that CBEC clearly opined that duty liability is not to be discharged by Job worker. This Circular was relied upon vide CESTAT in the case of M Tex. & D.K. Processors Pvt. Ltd. vs. CCE (supra) wherein it was held that the job worker was not required to pay duty even if the job work undertaken amounted to manufacture. We also notice that this judgment was upheld by Supreme Court in the case of .....

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hese Rule gives no scope to infer that if the job worker was not required to pay duty in terms of Rule 57(F)(4) it could be required to pay duty in terms of Rule 4(5)(a) because the conditions of Rule 57(F)(4) of Central Excise Rules, 1944 were stringent compared to the conditions of Rule 4(5)(a) of the Cenvat Credit Rules inasmuch as Rule 57(F)(4) categorically required the principal manufacturer to use the goods received from the job worker for further use in the manufacture of the final produ .....

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ra) CESTAT essentially held as under: Duty liability - Job worker - Respondents receiving grey MMF and knitted or crocheted fabrics from principal manufacturer under the cover of challans issued under Rule 4(5)(a) of Cenvat Credit Rules, 2001 and after completion of job work the goods stand returned to the principal manufacturer - Rule 57F(3) of erstwhile Central Excise Rules, 1944 and Rule 4(5)(a) ibid being independent provisions, fact that goods were not specified in the Notification No. 214/ .....

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