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CCE, Jalandhar Versus M/s Partap Steel Rolling Mills Ltd. (1935) Ltd. Chheharta, Amritsar

Benefit of N/N. 214/86 - job work - principal manufacturer not paid duty on job work goods - Held that: - as per N/N. 214/86, the job worker is entitled to clear the goods without payment of duty, in case duty has been paid by the principal manufacturer. The sole ground for denial of the benefit of N/N. 214/86 to the respondent by the Revenue is that the principal manufacturer has not paid duty. In fact, as principal manufacturer has exported the goods under bond which means that duty is leviabl .....

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ial) And Mr. Devender Singh, Member (Technical) Sh. Satyapal, AR for the appellant None. for the respondent PER: ASHOK JINDAL The Revenue is in appeal against the impugned order on the, ground that benefit of Notification No. 214/86 is not available to the 2. The facts of the case are that the respondent received scrap from various manufacturers of hand tools. The scrap is converted into billets and thereafter into rectangular parts. These rectangular parts are sent to hand tool manufacturers wh .....

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rom the said, the Revenue is before us. 3. The Id. AR reiterated the grounds of the Appeal and submits that as on the final product duty has not been paid, therefore, benefit of Notification No. 214/86 is not available. 4. On the other hand, none appeared on behalf of the respondent nor any request for adjournment has been received, the appeal is taken up for final disposal. We have perused the impugned order wherein the Ld. Commissioner (A) has examined the issue in detail. The department had b .....

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n No. 214/86 and thus had taken the liability to discharge obligation laid down in notification No. 214/86. The department has issued a number of show cause notices to the appellants pointing out to them that the given arrangement are not covered by the notification No. 214/86 as the job work came to scrap received from various suppliers. Further the contention of the department is that the activity of the conversion of billets into bars cannot be considered covered under notification No. 214/86 .....

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notification No. 214/86. As regards to the eligibility to exemption it has been submitted by them that expression in notification "leviable to duty excise in whole or part" indicates that the final product should not be exempted or chargeable to nil rate of duty. The goods cleared for export are not goods on which duty is not leviable but are the goods on which duty is leviable but is not being paid for reason of export. The appellants have contented that the adjudicating authority ou .....

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sal of final order No. 989-1004/2000-B dated 4/7/2000 referred to above whereunder appellants appeal was allowed by way of remand would reveal that the aspect relating to admissibility of benefit of notification No. 214/86 dated 25/3/86 has amended was duly raised and examined. The relevant para 2 of the Tribunal order dated 4/7/2000 is reproduced below:- The applicants who are represented by Shrie A.R. Madhav Rao learned counsel draw our intention to Tribunal's Final Order No. E/1270/98-B1 .....

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record to substantiate this claim. He submits that if an opportunity is given to the assessee the would be able contained in Notification 214/86 would not apply in the present as the goods cleared for export by the final product manufacturer cannot be deemed to be cleared without payment of duty, so as to attract the disqualification in Notification 214/86. At this juncture, Shri M.P. Singh, learned DR prayers that the other issues raised in the show cause notice and adjudicated upon by the Assi .....

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The plea of the appellants was that they have acted as a job worker on behalf of various manufacturers of hand tools namely M/s. Ajay Industries. M/s Ambika Forgings, Victor Tools, Dhanika Forgings. All these suppliers have supplied the waste and scrap for manufacture of bars and rods. In this case the appellants have placed reliance in case of M/s Ambika Forgings vs CCE reported as 1995(78) ELT-759. Final order No. E/23/95-B1 dated 23/1/95). Their contention was issue pertaining to admissibilit .....

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a Forgings were more or less similar to the facts of this case and the issue is also w.r.t. the benefit of notification No. 214/86. The Hon'ble Tribunal has further observed that the adjudicating authority was not correct in distinguishing the case on the ground that the case (i.e. case of M/s Ambika Forgings) is not relevant in deciding the issue. The relevant para 4 of CESTAT order which is quite relevant and important in the instant proceedings is reproduced below:- " Para 4 Accordin .....

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ld be entitled to the benefit in terms of 214/86 but on this issue, it appears he has not been examined in detail. It appears that the party also has not placed any evidence to show that the goods are exported by the respective suppliers. In these circumstances, we are of the view that the entire matter requires to be re-considered by the adjudicating authority. Accordingly we are remanding the matter for de-novo consideration. The party should avail this opportunity and adduce the evidence in s .....

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of export. In other words, if the appellants are able to adduce evidence in support of claim that the very goods have been exported they shall be entitled to benefit of notification No. 214/86. I find that in case of M/s Ambika Forgins referred to above decided by the Hon'ble CESTAT vide its Final order No. E/23/95-B1 dated 23/1/95, though the issue was as to whether the scrap getting generated in the tools manufacture could be sent without payment of duty yet the essential issue was as to w .....

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he Hon'ble Tribunal in above case that scrap can be removed without payment of duty meaning thereby that scrap is being used in the manufacture of billets and bars and is being returned in terms of notification No. 214/86. On the basis of this order of Hon'ble Tribunal the appellants have sought applicability of ratio of this decision to the fact of the present cases. I find even the Hon'ble Tribunal while passing final order No. E/ 1270/98 dated 11/08/98 appellant's case with re .....

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aws. It may be pertinent to mentioned here that in appeal No. 197/06, it has been observed by the adjudicating authority in order to avail benefit under notification No. 214/86, the suppliers of raw materials are required to submit a undertaking to the jurisdictional Asstt. Commissioner as prescribed under notification No. 214/86 and since in the said case no such undertaking was submitted by the suppliers to the effect, the benefit in terms of notification No. 214/86 has been sought to denied t .....

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he Hon'ble Punjab & Haryana High Court that goods exported under bond without payment of duty is not the same thing as goods wholly exempt or goods chargeable to nil rate of duty. In this cited case law final product was cleared under bond without payment of duty Modvat Credit was sought to be denied to the said party by the department holding that provisions of Rule 57C of the erstwhile Central Excise Rules, 1944 are attracted. But the Hon'ble High court had held that goods exported .....

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9) ELT 585, Further, I find the aspect that the goods were exported also stands supported and confirmed by the action of the revenue itself as in the show cause notices it has been alleged that the hand tools had been cleared without payment of duty which implicitly/explicitly referred to export only. In respect of December 93, there is no dispute with respect to the fact that the goods after being job worked and used for manufacture of hand tools were exported. In this appeal, it has not been d .....

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oods are cleared under notification No. 1/93, duty is not payable by the job worker by virtue of exemption granted under the notification No. 83/94 during the relevant period. In support of their contention that the hand tools manufactured by the said hand tools manufacturers were exported, the appellants have submitted certificates given by these hand tools manufacturers to the effect that they had manufactured the hand tools out of rectangular bars supplied by the appellants (manufactured on j .....

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3 without payment of duty then proceedings would have been initiated against them for recovery of duty. Vide his letter C.No. P-20/CE/Jal-1/Misc/12/2006/11192 dated 23/10/2006 and the Asstt Commissioner Central Excise Division, Jalandhar-l has submitted the report in respect of the parties namely M/s. Ambika Forging, Jalandhar, M/s. Ajay Industries, jalandhar, M/s B.S. International, Jalandhar and M/s. Bash Tools, Jalandhar. In the report it has been submitted that the records/information desire .....

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n respect of M/S Victor Tools Jalandhar, the Asstt. dated 05/12/2006 received in this office on 23/11/2006 has furnished the export and conversation details which tally with the details of export and scrap mentioned in the certificate dated 23/06/2006 issued by a Director of M/S Victor Tools, Jalandhar. These confirmations by the jurisdictional Asstt. Commissioners indicate that the certificates submitted by the appellants, which were given by the said hand tools manufactures are genuine, But st .....

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that on receipt of rectangular bars from M/s. Partap Steel Rolling Mills, Amritsar, if the said tool manufacturers had not used these bars in the manufacture of hand-tools and subsequently exported then there should have been demands against the said hand tools manufacturers as by virtue of undertaking filed in terms of notification No. 214/86, the said hand-tool manufacturers were bound to discharge duty liability. Details of such demands, if any, for the relevant period were sought. If there w .....

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he onus to discharge duty liability was on the said hand tools manufacturers and there exists no case for any demand of duty from the appellants. The Asstt. Commissioner, Central Excise Division, Jalandhar-l has submitted his report vide letter c. No. P-20/CEJAL-1/MISC/12/2006/4626 dated 25/05/2007 and the Asstt. Commissioner, Central Excise Division, Jalandhar-ll has submitted his report vide and C.No. 28/05/2007. The reports submitted by the Asstt. Commissioner do not lead to any inference at .....

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