TMI Blog2023 (3) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Commissioner, Authorised Representative for the Respondent PER: SANJIV SRIVASTAVA This appeal is directed against the order in appeal No BR/ 340/TH-I/2012 dated 26.11.2012. By the impugned order following has been held: 04. I have carefully considered the grounds of the appeal, written submissions made by the appellants; the oral/written submissions made by Respondent and also relevant provisions of law related to subject matter. The issue involved is Central Excise duty on the scrap generated in the manufacturing process at the job worker's premises should be paid by the principal manufacturer. 05. It is seen that the respondent avails Cenvat credit on various inputs. It is seen from the records (i.e. delivery notes) that they had sent inputs/partially processed inputs for further processing under Rule 4(5)(a) of Cenvat Credit Rules, 2004 to the various job workers. It appeared that the assessee received only semi finished goods; while scrap generated during the process carried out by the job worker was not returned to the assessee. The assessee vide their letter dated 10.12.2009 had confirmed that the job workers have cleared the scrap withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who had taken credit on the inputs. Further, Rule 4(6) of Cenvat Credit Rules, 2004 permits manufacturer of the final products who has sent the inputs or partially processed inputs outside his factory to a job worker, to clear the goods from the premises of the job worker subject to conditions laid down by the jurisdictional A.C./D.C.. 08. The facility of removal of inputs without payment of duty under Rule 4(5) of Cenvat Credit Rules, 2004 is subject to condition that the duty on the final products is charged by the manufacturer who had availed the credit. Normally the goods should be brought back to the manufacturer's premises and should be subjected to assessment at the time of removal. The exception contained in Rule 4(6) merely avoids bringing the goods to the manufacturers premises, it does not extinguish the duty liability of the manufacturer. There is nothing in the rules to indicate that the scrap arising at the job workers premises should not be brought back or that duty would not be payable on such scrap. Liability to duty does not ceases merely by not bringing the goods or scrap back to the manufacturer's premises. 09. Whereas 'scrap' generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not brought the scrap in his factory and simultaneously have not paid duty on the scrap. This fact came to know to the department at the time of scrutiny of the records of the respondent, otherwise it would have remained suppressed from the department. Hence, in the Show Cause Notice the proviso to Section 11A (1) of Central Excise Act, 1944 is invokable, the interest under Section 11AB of Central Excise Act, 1944 and penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944 is also imposable on the assessee. In view of the foregoing, the case laws referred by the respondent will not come to their help as the same are not relevant. 13. On the facts and grounds mentioned above the order passed by the lower authority dropping the proceedings is not legal and proper. I therefore, allow the Revenues appeal and accordingly pass order. ORDER I allow the Revenues appeal and set aside the impugned order of the lower authority and confirm the demand as set out in the Show Cause Notice under Section 11A of Central Excise Act, 1944 alongwith equal penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11AC, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is not returned back whether the supplier of inputs is required to pay appropriate Central Excise thereon? 3. Having heard rival parties and having examined the findings recorded in the order in original, it is not in dispute, that the assessee had paid duty on the scrap generated at the factory of the job worker for the period April 1999 to March 2000. There is no liability on the principal manufacturer-respondent after 31st March 2000 in view of amended Rule 57AC of the Cenvat Credit Rules. In view of this finding of fact, no substantial question of law arises in this appeal. Appeal is, therefore, dismissed in limine with no order as to costs. 3.3 In Rocket Engineering Corporation Ltd. [2006 (193) ELT 33 (T.)], Tribunal held: 11. The appellants contend that the Commissioner (Appeals) failed to appreciate the vital fact that nowhere in Rule 57AC(5)(a)/Rule 4(5)(a) of the Cenvat Credit Rules, there is any provision made to compel the principal manufacturer to bring back the scrap generated at the job workers end or to pay the Central Excise duty on the said scrap. 12. The Central Excise duty cannot be demanded from the appellants since the job worker is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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