TMI Blog2023 (9) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... ate for the appellant Shri P K Acharya, Superintendent (AR) for the respondent ORDER The sole, and limited, issue in this appeal of M/s Tungabhadra Holding Pvt Ltd is the determination in order [order-in-appeal no. BR/161//Th-I/2013 dated 13th March 2013] of first appellate authority, consequent on appeal directed by jurisdictional Commissioner of Central Excise, of inoperability of CENVAT credit in relation to job work undertaken by them owing to coverage by scheme for discharge duties of central excise at the final stage of manufacture by the principal as set out in notification no. 214/86-CE dated 25th March 1986. Essentially, it has been held that the appellant clears exempted goods which operationalizes rule 6 of CENVAT Credit Rules, 2004 on inputs used for such manufacture and, arising from failure to reverse credit to the extent of such deployment, rule 14 and rule 15 of CENVAT Credit Rules, 2004 come into play. 2. The appellant, a manufacturer of galvanized pipes and MS black pipes in their own right, also undertakes job work production in which their own inputs are consumed along with that supplied by the principal. On clearances effected as j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries clarifications issued vide Circular No. 10/75/CX.6, it was held that clearance [of] goods under provision of [Rule] 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 [with] 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 goods cleared in terms of provision of Rule 199BB would not be covered by the said expression inasmuch as the same are not chargeable to nil rate. In the present case, we find the job worker could have cleared the goods on payment of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job worker s end at the time of clearance of the goods, but ultimately gets paid at the manufacturer s end. In these circumstances, we are in agreement with the decision rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj Tempo. In the case of Bajaj Tempo, provision of Rule 57F as also provision of Rule 57C were considered in detail along with the consideration of Notification No. 217/86. It was observed that under Modvat scheme, credit of duty paid on notified inputs is to be given for payment of duty on the notified final products, if such inputs are used in or in relation to the manufacture of the final products and such inputs are not hit by exemption to Rule 57A. Notification No. 217/86 [which laid down the procedure for sending the basic raw material to the job worker s factory and receipt of the same in the manufacturer s factory after processing for further utilisation in the manufacture of the final products on which duty is paid by the manufacturer. The notification is mainly intended to avert payment of duty at each intermediate stage and take credit of such duty at each subsequent stage, starting from the basic material, turning out components and finally ending with ultimate final product. Hence, the scope of Rule 57C in such a situation like this has to be constituted in the context of the Modvat scheme and not to destroy the basic concept. 2. The revenue is denying the Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tri.)] and after taking note of the Ministries clarifications issued vide Circular No. 10/75/CX. 6, it was held that clearance under goods under 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 goods cleared in terms of provision of Rule 199BB would not be covered by the said expression inasmuch as the same are not chargeable to nil rate. In the present case, we find the job worker could have cleared the goods on payment of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job worker s end at the time of clearance of the goods, but ultimately gets paid at the manufacturer s end. In these circumstances, we are in agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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