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2018 (1) TMI 684

under Sub-rule (3) of Rule 6 of Cenvat Credit Rules, 2004, appellants were required to pay Service Tax, amount at prescribed rate of 8 or 10% during the relevant period. - Held that: - the goods which were processed by the appellants on being received from the principal manufacturer, which were returned back to the principal manufacturer were not exempted goods since the same were subjected to Central Excise duty and responsibility to pay Central Excise duty on the said goods was on the principal manufacturer as per the provisions of N/N. 214/86-CE dated 25/03/1986 - the issue settled by Larger Bench decision by this Tribunal in the case of Ispat Industries Ltd. Versus Commissioner of Central Excise, Raigad [2007 (2) TMI 5 - CESTAT, MUM .....

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ed themselves with the Jurisdictional Central Excise Officers for availing exemption under Notification No. 214/86-CE dated 25/03/1986 and used to send semi-finished goods to the appellants and appellants used to undertake job work on the same and used to return the processed goods to customers who were the principal manufacturers and the said processed goods were covered by the Challans prescribed by said Notification No. 214/86-CE dated 25/03/1986. The appellants were availing Cenvat credit of duty paid on inputs and Service Tax paid on input services. The said inputs and input services were consumed both for manufacture of goods which were cleared on payment of duty by the appellants and also in the process of manufacture undertaken in o .....

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short paid Central Excise duty which is scribed in the above stated table as in respect of stock transfer. The issue involved was that the final products were sold by the appellants to independent buyers and at the same price the final products were also transferred to their other unit without involving procedure of sale. It appeared to Revenue that the assessment value should be on the basis of assessable value arrived at by following the procedure laid down under Rule 8 of Central Excise Valuation (Determination of Price of Excisable Value) Rules, 2000. The said Rule provides for arriving at the assessable value at 110% of the cost of manufacture. If the goods are not sold but are stock transfer. As per Corrigendum dated 03/12/2008 to sa .....

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account of allegation of undervaluation of goods stock transferred to other units under the provisions of Section 11A of the Central Excise Act, 1944 and equal amount of penalty was imposed. In similar manner, the demands raised in other Show Cause Notices stated above were also confirmed and equal amount of penalty was imposed. Being aggrieved by the said orders, the appellant have preferred above stated two appeals in respect of above stated 4 Show Cause Notices before this Tribunal. 3. Heard the ld. Counsel for the appellant, who has submitted that it is well settled principles of law that the procedure set out in Notification No. 214/86-CE dated 25/03/1986 provides that the principal manufacturer undertakes to pay duty of Central Excis .....

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the said provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 did not apply to the same. He has relied upon the ruling by Hon ble Punjab & Haryana High Court in the case of Commissioner of Central Excise Versus Happy Forging Ltd. reported at 2011 (265) E.L.T. 0197 (P & H). He has further submitted that in respect of the alleged short payment of Central Excise duty on account of stock transfer the issue was settled by Larger Bench decision by this Tribunal in the case of Ispat Industries Ltd. Versus Commissioner of Central Excise, Raigad reported at 2007 (209) E.L.T. 185 (Tri. Larger Bench). He has taken us through the issue referred to Larger Bench in the said case, which is as follows:- The issue referred to the Larger Bench is .....

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ecord, we find that the goods which were processed by the appellants on being received from the principal manufacturer, which were returned back to the principal manufacturer were not exempted goods since the same were subjected to Central Excise duty and responsibility to pay Central Excise duty on the said goods was on the principal manufacturer as per the provisions of Notification No. 214/86-CE dated 25/03/1986. Further, the issue settled by Larger Bench decision by this Tribunal in the case of Ispat Industries Ltd. Versus Commissioner of Central Excise, Raigad (supra) is squarely applicable in the present case, in respect of the confirmation of demand on account of short payment of levy. In view of the above stated findings, we hold th .....

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