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M/s Vacmet India Ltd., Unit - II & III (Formerly known as M/s Vacmet Packagings (India) Pvt. Ltd. Unit II & III) Versus Commissioner of Central Excise, Lucknow

2018 (1) TMI 684 - CESTAT ALLAHABAD

CENVAT credit - job-work - It appeared to Revenue that the semi processed goods which were sent back to the principal manufacturers were exempted goods and therefore, on the value of such goods 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 return .....

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ect of the confirmation of demand on account of short payment of levy - appeal allowed - decided in favor of appellant. - Appeal No. E/118 & 119/2010-EX [ DB ] - Final Order No. A/71937-71939/2017-EX [DB] - Dated:- 31-10-2017 - Mr. Anil Choudhary, Member ( Judicial ) And Mr. Anil G. Shakkarwar, Member ( Technical ) Shri B. L. Narasimhan, Advocate & Shri Atul Gupta, Advocate, for Appellant Shri Rajeev Ranjan, Joint Commissioner (AR), for Respondent ORDER Per : Anil G. Shakkarwar The above sta .....

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h the units were having separate independent registration with Central Excise Department. They were also availing facility of Cenvat credit. Both the units were engaged in manufacture of Metalized Polyester Film falling under Tariff Item No. 39219093 of the first Schedule to Central Excise Tariff Act, 1985. The appellants also undertook job work of Metallization of Polyester or Plastic Films for their customers where customers have registered themselves with the Jurisdictional Central Excise Off .....

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ces. 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 order to complete job work on the semi-finished goods received from principal manufacturers which were subsequently sent back to the principal manufacturers after completion of process of job work. It appeared to Revenue that the semi processed goods which were sent back to the principal manufacturers were .....

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II 2003-04 to 2007-08 2,86,41,271.00 1,10,30,517.00 3,96,71,788.00 02. 12/Commr./LKO/08-09 dt. 11.11.08 Unit No. III 2003-04 to 2007-08 4,30,44,884.00 3,95,79,868.00 8,26,24,752.00 03. 04/Commr./LKO/09-10 dt. 01.05.09 Unit No. II 2008-09 (upto Jan. 09) 1,39,80,219.00 19,12,091.00 1,58,92,310.00 04. 05/Commr./LKO/09-10 dt. 01.05.09 Unit No. III 2008-09 (upto Jan. 09) 4,37,86,627.00 86,91,111.00 5,24,77,738.00 The total demand in respect of job work in the Show Cause Notice dated 17/06/2008 was &# .....

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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 said Show Cause Notice dated 17/06/2008 Central Excise dut .....

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ct of job work was within the knowledge of the Department/Revenue and therefore, there was no suppression and therefore the extended period of limitation was not invokable in respect of the demand of short payment on account of stock transfer. They submitted that they were selling their goods from the factory gate to independent unrelated buyers as well as captively consumed stock transferred to their own unit and that provisions of Rule 8 were applicable where the entire production was captivel .....

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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 th .....

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ing subjected to duty of Central Excise at the hands of principal manufacturer and therefore they cannot be termed as exempted goods or attracting nil rate of duty, attracting provisions of Rule 6(3) of the Cenvat Credit Rules, 2004. Further, the said Rule 6(3) of the Cenvat Credit Rules, 2004 provides for collection of amount equal to 8 to 10% of the value at which such goods are sold. The fact is that the said goods were never sold and they were returned after the process of job work. Further, .....

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f semi-finished goods on Challan itself established beyond doubt that the goods ultimately manufactured out of such job work were not exempted nor were attracting nil rate of duty and therefore 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 submi .....

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were transferred to another plant of the same assessee is required to be determined as per Rule 4 of the Cenvat Excise Valuation Rules, 2000or as per Rule 8 of the said Rules in a case where the same goods were also sold to independent buyers. He has further taken us through the decision in the said case recorded at Para 9, which is as follows:- In view of what we have observed above, we answer the reference in the following terms: (a) The provisions of Rule 8 of the Valuation Rules will not ap .....

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