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Thermax Babcock & Wilcox Ltd., Thermax Ltd. Versus Commissioner of Central Excise, Pune

2017 (12) TMI 266 - CESTAT MUMBAI

Liability of duty on intermediate goods - job-work - who is liable, job-worker or principal manufacturer? - Rule 4 (5) (a) and Rule 4 (6) of CCR - N/N. 214/86-CE dated 25.3.1986 - whether job-worker is exempt from duty on intermediate goods when principal manufacturer discharges such duty? - Held that: - the fact remains is that neither the goods after jobwork were cleared as such on payment of duty nor were used in manufacture of dutiable final products by the Principal manufacturer. Hence .....

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e premises of jobworker after payment of duty. Notably it is not the case of the appellant that the Principal manufacturer paid duty at anytime as the goods manufactured by him were exempted from duty. Thus the liability for payment of duty on such intermediate goods manufactured by the Jobworker is on jobworker only. - The Jobworker, M/s Thermax being manufacturer of excisable goods is liable to pay duty on the intermediate goods manufactured by him on jobwork basis which supplied to their .....

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bcock & Wilcox Ltd. (hereinafter referred to as Babcock ) and the job worker M/s. Thermax Ltd. (hereinafter referred to as Thermax ), the Division Bench was of opinion that the provisions of Rule 4(5)(a) of the Cenvat Credit Rules, 2001 (hereinafter referred to as the 2001 Rules ) and Cenvat Credit Rules, 2002 (hereinafter referred to as the 2002 Rules ) makes the job worker liable to duty on the intermediate manufactured by it for the principal manufacturer when procedure prescribed by Noti .....

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y on intermediate manufactured by it when principal manufacturer discharges such duty. Accordingly, following question has been referred by the Division Bench for answer by the Larger Bench: In the facts and circumstances of the present case, when the principal manufacturer (Babcock) clears the final product without payment of duty by availing exemption under a notification, whether the job-worker M/s Thermax, who manufactures intermediate parts of boiler on the inputs sent by Babcock under Rule .....

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was taken by the appellants without following the procedure prescribed thereby, the appellants had pleaded before Authority below that the job worker appellant was not governed by Notification 214/86-CE dated 25.3.1986 since Rule 4(5)(a) of the Cenvat Credit Rules, 2001 and 2002 read with Rule 4(6) of the said Rules granting exemption of duty to a job worker. 3. Both sides say that the dispute covered the period September 2001 to June 2002 and the dispute before Division Bench was that when Bab .....

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eof. The referring Bench found in clear terms that Babcock (the principal manufacturer) had not paid duty on the intermediate, clearing final product exempt from duty under a different notification. So also, Thermax (the job worker) did not pay duty on the intermediate manufactured by it for Babcock. Examination of the reference Bench was confined to the fact situation pleaded by the appellant before learned adjudicating authority that it has not followed the procedure prescribed by Notification .....

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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, repair, re-conditioning or any other purpose, and it is established from the records, challans or memos or any other document produced by the assessee taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not received b .....

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ans and memos or any other document and take cenvat credit on such input, he is obliged to discharge the ultimate excise duty liability arising on intermediate goods manufactured by the job worker for it. 4.4 The sub-rule (6) of Rule 4 of the Cenvat Credit Rules, 2001 which allows a job worker to clear the final products from its factory with the permission of Commissioner, as that stood in the statute book at the relevant time was placed by the appellant as under: The Commissioner of Central Ex .....

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e job worker. 4.5 It is submission of the appellants that Rule 4(5)(a) does not oblige a job worker to pay duty on intermediate goods which can be inferred from the implications of the provisions contained thereon as has been held by Tribunal in the case of M. Tex & D.K. Processors (P) Ltd. vs. CCE, Jaipur 2001 (136) ELT 73 (Tri.-Del). Appellants further says that when two Members of the Bench hearing the said case differed in their opinion, that was referred to a Third Member who ultimately .....

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orking contracts Subject : Availability of Modvat credit on inputs used by job workers in job-working contracts - Regarding. Instances have come to the notice of the Board where job workers have availed the credit on inputs used for job-work done by them under the provisions of Rule 57F(4) of the Central Excise Rules, 1944. 2. Under the provisions of Rule 57F(4), a manufacturer can get the job work done on his inputs or on partially processed inputs in terms of the provisions of Rule 57F(4) of t .....

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ral Excise Act, 1944 was more strict. But liberal position has been enacted in Rule 4(5)(a) of the Cenvat Credit Rules, 2001. Appellants further relied on the decision of Tribunal in the case of Vandana Dyeing Pvt. Ltd. vs. CCE 2014 (307) ELT 528 (Tri.-Mum.) to support its contention. It was emphasized by appellants that the view of the CBE&C exempting the job worker from duty liability can be appreciated from para 3.18 of its Manual (copy of which is available at page 49 of the compilation .....

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y the principal manufacturer only and the job worker shall have no option to pay duty. 4.7 Further, relying on the judgment of Tribunal in the case of Dhana Singh Synthetics Pvt. Ltd. vs. CCE 2015 (326) ELT 609 (Tri.-Ahmd.), appellants say that by necessary implication of Rule 4(5)(a) the job worker is exempt from duty liability on intermediate goods when that is discharged by principal manufacturer. (Relying on the decision of Apex Court in the case of International Auto Ltd. vs. CCE, Bihar 200 .....

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per contra, submits that Thermax is holding company and Babcock is a subsidiary thereof. Both units were situated at the same place at the material time. The facts on record demonstrate that Babcock (principal manufacturer) received input and took credit of the excise duty paid thereon and removed such input to Thermax (job worker) for use in the manufacture of intermediate goods for it for ultimate use thereof in manufacture of final product by Babcock . Thermax as a job worker manufactured bo .....

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es of 1944 and various subjects of 1944 Rules were considered by legislature while incorporating the 2001 Rules as well as the subsequent 2002 Rules. Similarly sub-section (4) of Section 5A of the Central Excise Act, 1944 has also made provision to give effect to the notifications issued under Rule 8 of Central Excise Rules, 1944. Therefore those notifications are deemed to have been issued under the provisions of Section 5A of Central Excise Act, 1944 have the same effect what that was under ea .....

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ying on para 4 and 5 of the decision of Tribunal in the case of Facit Asia Ltd. vs. CCE 1991 (54) ELT 347 (Tri.-Chennai), Revenue submitted that Rule 57F(2) was similar to Rule 4(5)(a) of 2001 Rules and the decision in Facit Asia (supra) case was followed in the case of CCE vs. Bright Steel Mac Fabrics 1997 (94) ELT A145 (SC). In Bright Steel case the job worked goods were tested under the provisions contained in Rule 57F(2) of the Central Excise Rules, 1944. The manner of taking credit on the i .....

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ach cases leads to its own decision. 5.3 Revenue further relied on the decision of Tribunal in the case of Desh Rolling Mills vs. CCE, Delhi 2000 (122) ELT 481 (Tri.-Delhi) to say that following of procedure prescribed by Notification 214/86-CE dated 25.3.1986 is mandatory for the principal manufacturer as well as job worker to clear the job worked goods without duty by a job worker. In a batch of appeals in Desh Rolling Mills case (supra) such principle was laid down on the finding of fact ther .....

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that being the mandate of law, intermediate goods are allowed to be cleared without payment of duty. Thus mandate of that notification cannot be given go bye. Parties have to prove on record that the supplier of raw material ultimately pays duty on the final product manufactured out of the duty free intermediates used in manufacture of such finished product fulfilling conditions of Notification No. 214/86-CE. Same ruling was made in the case of CCE, Delhi-III vs. Vijay Vallabh Rolling Mills 201 .....

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urat vs. Span Heat Transfer Equip. Mfrs. Pvt. Ltd. 2001 (135) ELT 861 (Tri.-Mumbai), to submit that Notification No. 214/86-CE shall have application to all cases of the job worked goods and in terms of such notification, where the job worker does not pay duty on intermediate goods manufactured by it, supplier of the input pays duty thereon. According to Revenue, the decision of Tribunal in Jinabakul Forge Pvt. Ltd. vs. CCE, Belgaum 1997 (93) ELT 373 (Tri.-Chennai) is also in this direction. 5.5 .....

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whether shall cause hardship to it is immaterial to law, since the job worker is a manufacturer of intermediate goods following the principles of law laid down by Apex Court in the case of Britannia Biscuit Co. Ltd. vs. CCE, Madras 1997 (89) ELT 22 (SC) and liable to duty thereon. Accordingly a job worker clearing jobworked goods duty-free making use of the input supplied by the principal manufacturer, shall have to meet the tests of notification No. 214/86-CE dated 25.3.1986. 5.6 Learned AR fo .....

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mbai) as well as Kriti Industries (I) Ltd. vs. CCE, Indore 2017 (350) ELT 257 (Tri.-LB), to submit that payment of 8% and 10% levy by principal manufacturer under Rule 6(3) of Cenvat Credit Rules, 2001 is not a duty paid under law for which there cannot be further demand of duty on intermediate from principal manufacturer, learned AR of Revenue repels such argument of appellants on the ground that payment of 8% or 10% amount as the case may be, by the principal manufacturer under Rule 6(3) of th .....

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he amount of 8% or 10% recovered under Rule 6(3) of Cenvat Credit Rules, 2001. That relates to the basis for calculation of the 8% or 10% recovery. 5.9 Learned AR for Revenue explains that Modvat Scheme is to remove cascading effect as has been held by Apex Court in para 9 and 10 of the said judgment in the case of Ichalkaranji Machine Centre Pvt. Ltd. vs. CCE, Pune 2004 (174) ELT 417 (SC) which read as under: 9. Modvat is basically a duty-collecting procedure, which aims at allowing relief to a .....

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edule. Under rule 57G, every manufacturer was required to file a declaration before the jurisdictional Assistant Collector, declaring his intention to take Modvat credit after paying duty on the inputs. The object behind rule 57A read with rule 57G and rule 57-I was utilization of credit allowed towards payment of duty on any of the final products in relation to manufacture of which such inputs were intended to be used in accordance with the declaration under rule 57G. Rule 57-I referred to cons .....

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ble to pay duty on the incidence of manufacture following the ratio laid down by the Apex Court in the case of Ujagar Prints 1988 (38) ELT 535 (SC). Realization of duty is on the goods manufactured. Therefore the job worker Thermax having manufactured the goods for Babcock, is liable to duty on the intermediate manufactured by it. To claim no duty liability by Thermax on the intermediate, it was required to satisfy the condition of Rule 4(5)(a) of the Cenvat Credit Rules, 2001 read with Notifica .....

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for Revenue further explains that appellants proposition that where the principal manufacturer discharges duty liability on the intermediate goods, that absolves job worker from such liability shall not be disputed unless such proposition is made with evidence of payment of duty by the principal. In the present case duty was not paid by Babcock. Following the decisions of Apex Court in the case of Modi Alkalies & Chemicals Ltd. 2004 (171) ELT A32 (SC), Parle Bisleri Pvt. Ltd. 2011 (263) ELT .....

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o courts should look into the hardship or loss of benefit of a tax payer while dealing with the provisions of the statute since exemption is an exception and taxing is a Rule. Burden of proof to claim an exemption is required to be discharged by the claimant thereof. Strict construction of exemption provisions is the Rule of law. Apex Court reminds that taxation is Rule and the benefit and exemption are exceptions. Therefore to claim exemption from the scope of the levy, the claimant thereof has .....

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in that case and such decision upheld by the Hon ble Supreme Court as reported in 2002 (139) ELT A88 (SC). 6. In its rejoinder, learned counsel for appellant submitted that the judgments relied upon by it exempts a job worker from duty liability. The decision in M. Tex (supra) does not specifically say whether there was discharge of duty liability by the principal manufacturer. But such proposition of appellant is seriously objected by Revenue on the ground that principal manufacturers have disc .....

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ards such plea relying on decision in Kartar Rolling Mills (supra) as well as Desh Rolling Mills (supra) stating that those were decided in the context of Rule 57F(2) and held that compliance to Notification 214/86-CE dated 25.03.1986 is mandatory. The duty not paid on input not being taken credit in Desh Rolling Mills case (supra), Tribunal held that there is no necessity of further liability since the inputs were duty free inputs. So the contention of Revenue is that Desh Rolling Mills (supra) .....

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by job worker. The said para reads as under: 3. We are also in agreement with the appellant s contention that Rule 57C debars taking of credit in respect of the inputs used in the manufacture of the final product, if final product is exempted from the whole of duty of excise leviable thereon or chargeable to nil rate of duty. As such, to attract the provisions of Rule 57C, two situations in respect of the final product should be satisfied. Either the final product should be exempted, which situa .....

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der provision of 191BB for export without payment of duty would not get covered by the above expression. Reference was made to the advice received from the Ministry of Law dealt in the paragraph of 9 in the said decision. It was opined in the said letter of the Law Ministry that the term exempted has a definite connotation. The same as attributed to the notification issued by the Central Government. Similarly, the chargeable to nil rate of duty would refer to the tariff rate being nil and the go .....

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ufacturer s end. In these circumstances, we are in agreement with the decision rendered in the case of Bajaj Tempo and Jindal Polymers. 6.3 According to appellant, payment of duty in terms of Section 5A notification i.e. 214/86-CE is not the mandate of law for which appellant relies on RSWH Ltd. 2014 (343) ELT 1041 (Tri.-Del.), to submit that Rule 4(5)(a) is a procedural law without casting any liability on appellant. So also the decision of the Apex Court in Ujagar Prints (supra) has no relevan .....

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ax Babcock using the inputs supplied to it and cleared the same back to M/s. Thermax Babcock who used such intermediate goods in manufacture of final products but did not pay any duty on clearance of such final products. 7.1 The term manufacture is defined under Section 2 (f) of the Central Excise Act which includes any process (i) Incidental or ancillary to the completion of a manufactured product ; and (ii) which is specified in relation to any goods in the Section or Chapter notes of the Firs .....

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only a person who employs hired labour in the production or manufacturer of excisable goods, but also any person who engages in their production or manufacture on his own account; [Emphasis supplied] The definition of the manufacturer says that any person who is engaged in any of the activity specified in clause (i) to (iii) of Section 2(f) of the Act would be called as manufacturer. It is the manufacturer who under Central Excise Act and Rules is liable to pay duty unless otherwise exempted. T .....

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on in the adjudication. That was issued by the Government in terms of Rule 8 (1) of Central Excise Rules, 1944. By virtue of Section 5 A (4) the legislature has provided that the exemption provided under Rule 8 (1) shall continue to remain in force. The relevant Section 5A (4) as was in force during the material period reads as under : SECTION [5A. Power to grant exemption from duty of excise. (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may .....

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nomic zone]] and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and (ii) [brought to any place in India]. Explanation. In this proviso, [ free trade zone , [ special economic zone ]] and hundred per cent export-oriented undertaking shall have the same meanings as in Explanation 2 to sub-section (1) of section 3. [(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods fro .....

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nment may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been .....

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ion granted in relation to any excisable goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the statutory duty. Explanation. Form or method , in relation to a rate of duty of excise means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable : [Emphasis supplied] (4) Every notification issued under sub-rule (1 .....

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ub-section (1) or sub-section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.] 7.3 Cenvat Credit Rules, 2000 and 2002 Rules were framed under Section 37 of the Central Excise Act and Finance Act, 1994. That does not vest any power to grant exemption from payment of duty. Thus the applicability of Rule 4 (5) and (6) to grant exemption to the assessee i.e job-worker from payment of duty is inconceiva .....

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(1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods specified in column (1) of the Table hereto annexed (hereinafter referred to as the said goods) manufactured in a factory as a job work and :- (a) used in relation to the manufacture of final products, specified in column (2) of the said Table, (i) on which duty of excise is leviable in whole or in part; or (ii) for removal to a unit in a free trade zone or to a hundred per cent. export-oriented undertak .....

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of the supplier of raw materials or semi-finished goods - (i) on payment of duty for home consumption (on which duty of excise is leviable whether in whole or in part); or (ii) without payment of duty under bond for export; or (iii) without payment of duty to a unit in a free trade zone or to a hundred per cent. export-oriented undertaking or to a unit in an Electronic Hardware Technology Park or Software Technology Parks or supplied to the United Nations or an international organisation for th .....

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ct of which :- (i) the supplier of the raw material or semi-finished goods gives an under-taking to the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise ] having jurisdiction over the factory of the job worker that the said goods shall be (a) used in or in relation to the manufacture of the final products in his factory; or (b) removed from his factory without payment of duty (i) under bond for export; or (ii) to a unit in a free trade zone or to a hundred per c .....

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ion from his factory, or (d) used in the manufacture of goods of the description specified in column (1) of the table hereto annexed by another job worker for further used in any of the manner provided in clause (a), (b) and (c) as above. (ii) the said supplier produces evidence that the said goods have been used or removed in the manner prescribed above ; and (iii) the said supplier undertakes the responsibilities of discharging the liabilities in respect of Central Excise Duty leviable on the .....

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ucts (1) (2) All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than high speed diesel oil and motor spirit, commonly known as petrol. All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely :- (i) matches; (ii) fabrics of cotton or man-made fibres falling under Chapter 52, Chapter 54 or Chapter 55 of the First Schedule to the said Act; (iii) fabrics of cotton or man-made fib .....

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oducts on which duty of excise is leviable or which are cleared as such from the factory of supplier of raw material or semi finished goods either without payment of duty under bond for export or on payment of duty for home consumption. Such exemption is applicable only to those goods in respect of which the supplier gives undertaking to the Assistant Commissioner of Central Excise having jurisdiction over the factory of job worker. The facts of the case under reference are entirely different fr .....

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redit Rules, 2001 and 2002 relying upon Rule 4 (6) of the said Rules, appellant claimed that the Principal manufacturer can also remove the goods from the job-worker premises either on payment of duty or for export, under Bond. The Rule 4 (5) (a) and Rule 4 (6) of Cenvat Credit Rules, 2001 and 2002 relied upon by the Appellant in support of their contention read as under : Rule 4(5)(a) - The CENVAT credit on inputs shall be allowed even if any inputs as such or after being partially processed ar .....

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take the CENVAT credit again when the inputs or capital goods are received back in his factory Rule 4(6) The Commissioner of Central Excise having jurisdiction over the factory of the manufacturer of the final products who has sent the input or partially processed inputs outside his factory to a job-worker may, by an order, which shall be valid for a financial year, in respect of removal of such input or partially processed input, and subject to such conditions as he may impose in the interest .....

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(5) (a), not cast any liability of duty upon the principal manufacturer who has sent the inputs for job-work other than the condition that in case of non receipt of goods within the stipulated period he shall be liable to reverse the cenvat credit availed on such inputs. The rule is confined to the scope of cenvat credit but has no relation with manufacture, manufacturer and payment of duty on the manufactured goods. 7.5 Similarly Rule 4 (6) is concerned with the condition under which the finish .....

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ut payment of duty. Such a situation arises in case where the cenvated inputs are sent for job-work and finished goods manufactured therefrom is cleared from the job-work premises. It is a facility to avoid the return of the finished goods to the factory of Principal manufacturer and also to save the logistic cost. Thus Rule 4 (5) and Rule 4(6) have been issued under Cenvat Credit Rules, 2001 and 2002 Rules as the conditions under which cenvat credit can be allowed to a principal manufacturer an .....

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to own the liability to pay such duty. It is only by virtue of the Notification No. 214/86 CE dt. 25.03.1986 that the liability of the jobworker to pay duty is transferred to the Principal manufacturer who undertakes to pay duty. 7.7 The intention of enactment of Notification(supra) was to shift the liability of payment of duty from jobworker to the Principal manufacturer under certain conditions as provided in the said notification. There is no blanket machinery provisions in the central excise .....

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, the jobworker would be saved from payment of duty on goods manufactured by him. 7.8 In the case under reference, the facts of non payment of duty on final products by the Principal manufacturer is not disputed. The goods received from the jobworker were not used in the manufacture of dutiable final products but in goods on which no duty was paid. In such case when the Principal manufacture did not intend to pay duty on the final products, the jobworker who is manufacturer of intermediate goods .....

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9 The Appellant has relied upon the Tribunal s order in case of M/s M.Tex & D.K. Processors P. Ltd Vs. CCE, Jaipur 2001 (136) ELT 73 (TRI DEL) to support their views. However the facts are entirely different as the Principal manufacturer was sending goods to the jobworker in that case under rule 57 F (4) which reads as under : 57F(4) -The inputs can also be removed as such or after they have been partially processed by the manufacturer of the final products to a place outside his factory und .....

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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. Since the rule provided for exemption where the Principal Manufacturer pays duty on finished goods and therefore it was held that no duty is liable to be paid by the Jobworker. The jobworker was exempted from payment of duty in case where the goods arising out of job work were to be used by the Principal man .....

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al products by the Principal manufacturer. Hence the duty liability would be on the real manufacturer of goods i.e the Jobworker. Since the Principal manufacturer pays the duty on the product arising out of manufacture even at the jobworkers end, he is eligible to avail credit. The Rule 4 (5) (a) thus is a facility to the principal manufacture to send goods for jobwork on which cenvat has been availed. It is nothing to do with the duty payment of goods. 7.11 Rule 4 (6) is a facility to the Princ .....

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Vs. CCE, Ahmedabad 2009 (248) ELT 203 (TRI) were rendered considering Rule 4 (5) (a) of Cenvat Credit Rules, 2001 and 2002 Rules as pari materia to 57 F (4) of erstwhile Central Excise Rules, 1944. However in our considered view Rule 57F (4) provided for payment of duty by the Principal manufacturer whereas Rule 4 (5) (a) only provides sending of cenvat availed inputs for jobwork and return of same to the Principal manufacturer implying that the Principal Manufacturer shall pay duty on the same .....

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der relied upon by the Appellant in case of ESSAR STEEL LTD. Vs. CCE, RAIPUR 2016 (341) ELT 145 (TRI) also says that the jobworker is not liable to pay duty if the Principal manufacturer is paying duty on the jobwork on returned goods at the time of clearance as such from the factory of the Principal manufacture or at the time of removal of final products in which such jobwork returned goods are used. The Para 6 of the decision dealing with the findings of the Tribunal is as under : 6. It is thu .....

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ot required to pay duty in terms of Rule 57F(4) it could be required to pay duty in terms of Rule 4(5)(a) because the conditions of Rule 57F(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 57F(4) categorically required the principal manufacturer to use the goods received from the job worker for further use in the manufacture of the final product or removing after payment of duty for home consumption or removin .....

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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. 214/86-C.E. will not make a difference - No duty liability can be fasten .....

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sed as processed fabric not exempt under Notification No. 214/86-C.E. - HELD : Inputs received under Central Excise Challans and not under Notification No. 214/86-C.E. - As per C.B.E. & C. Circular No. 306/22/97-CX, dated 30-3-1997 for job work undertaken in terms of Rule 57F(4) ibid, duty liability to be discharged by principal manufacturer and not by job worker - No dispute that principal manufacturer cleared finished goods on payment of duty - Case of revenue neutral as any payment of dut .....

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ppellant also relied upon the judgment of Hon ble Apex Court in case of M/s International Auto Ltd. vs. CCE, Bihar 2005 (183) ELT 293 (SC). In the said case the dispute related to valuation of goods for the purpose of levy of duty at the Jobworkers end. The controversy was not related to liability of duty of job worker. It is undisputed in the present case that the Principal manufacturer was not paying duty on removal of final products and had also not opted to avail the benefit of Notification .....

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acture is not discharging duty either on jobwork goods or on final products in which such jobwork goods are consumed. In such case the responsibility lies the Jobworker who is the ultimate manufacturer of the goods to discharge the excise duty. 7.16 Revenue has placed reliance upon the Tribunal judgment in case of M/s Facit Asia Ltd. Vs. CCE 1991 (54) ELT 347 (TRI). Tribunal was seized of the question as to whether the duty paid by the jobworker is available to the Principal manufacturer when th .....

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tification(supra) the goods manufactured at Joboworker s end are exempted only if the same or the final product in which such intermediate goods are used are liable for duty at the end of the Principal manufacturer which is absent in the present reference. 7.17 In case of Collector Vs. Bright Steel Mac Fabrics 1994 (69) E.L.T. 276 (Tribunal) as upheld by the Hon ble Apex Court in case of CCE Vs. Bright Steel Mac Fabrics 1997 (94) ELT A145 SC, the Tribunal has rightly held that Rule 57F (2) does .....

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n or in relation to the manufacture of final product on which duty of excise is leviable whether in whole or in part subject to the condition that supplier of the raw materials gives an undertaking to the Assistant Collector of Central Excise, having jurisdiction over the factory of the job worker, that the goods shall be used in or in relation to the manufacture of the final products in his factory; the said supplier produces evidence that the goods have been so used and he undertakes the respo .....

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ord by the Appellants only refer to the movement of excisable goods under rule 57F(2). In view of this, the reliance placed by the Appellants on the observation of the Tribunal in respect of Notification 214/86 in the remand order is not tenable. We also observe that the Tribunal directed the Adjudicating Authority to decide the matter in the light of the observations and also according to the law. Notification No. 214/86 nowhere provides that the supplier of the raw material will be liable to p .....

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ex Court in case of M/s Kartar Rolling Mills Vs. Commissioner of Central Excise, New Delhi 2006 (197) ELT 151 (SC) held that the assessee jobworker i.e the Appellant failed to bring any evidence on record to prove that the supplier of raw material had supplied the materials to them under the provisions of Notification No. 214/86 and thus the duty demand against the assessee undertaking jobwork was upheld. The ratio laid down in the said judgment is squarely applicable to the present reference. 7 .....

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