9911796707
TMI Blog2023 (11) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and cleared these forgings on payment of duty. It was found that the inputs in the nature of bars for Dies, Welding Rods, Furnace Oil, Steel sheets, Lubricants and LPG, and input services like GTA, Manpower and Courier had been commonly used by the appellant in the manufacture of their own dutiable final products as well as in the manufacture of forgings which was cleared to M/s.TENGEL without payment of duty. The Department was of the view that the goods cleared to M/s.TENGEL without payment of duty has to be construed as exempted goods and that the appellant has to maintain separate accounts of inputs and input services used in relation to the manufacture of dutiable gods and those in relation to the goods manufactured on job work basis and cleared to the principal manufacturer without payment of duty. According to the department, the appellant has to reverse the credit that is attributable to the exempted goods (goods cleared to the principal manufacturer). Show cause notice dt. 09.05.2013 was issued for the period 2008-09 to 2012-13 upto June 2012 proposing to demand credit availed on common inputs and input services for dutiable goods and exempted goods. After due proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NNAI to argue that the facts are almost similar to the case on hand and it was held by the Tribunal that there is no requirement to maintain separate accounts. Ld. Counsel prayed that the appeal may be allowed. 3. Ld. A.R Shri Harendra Singh Pal appeared for the Department. It is submitted by the Ld. A.R that the forgings cleared to the principal manufacturer has been cleared without payment of duty. The appellant has also manufactured forgings on their own account and cleared them on payment of duty. Those forgings cleared without payment of duty has to be considered as exempted goods and therefore Rule 6 (3) has to be followed by the appellant. The appellant having not maintained separate accounts, is liable to reverse the credit or pay 10% / 5% / 6% as applicable to the exempted goods. It is prayed that the appeal may be dismissed. 4. Heard both sides. 5. We have to say that show cause notice has been issued alleging that the appellant has cleared the final product to the principal manufacturer without payment of duty and also cleared the final product manufactured on its own account by paying duty. It is thus the case of the department that the appellant has cleared exempted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants from claiming benefit of Notification No. 217/86-C.E., dated 2nd April, 1986. As stated above, the Notification itself clarifies that the inputs can be used within the factory of production or in any other factory of the same manufacturer. 10. Mr. Lakshmikumaran relied upon the decision of this Court in the case of Collector of Central Excise, New Delhi v. Hindustan Sanitaryware & Industries reported in 2002 (145) E.L.T. 3 (S.C.), wherein, in respect of this very Notification, this Court has held that so long as duty is paid on the final product, the mere fact that duty was not paid on the intermediate product would not disentitle the manufacturer from the benefit of Notification No. 217/86-C.E., dated 2nd April, 1986. In that case, the input was plaster of paris, the intermediate product was moulds made out of the plaster of paris, the final product was sanitaryware. In our view, the facts of that case are identical to the facts of the present case. The ratio laid down therein fully applies to this case. 11. In this view of the matter, we set aside the impugned Judgment and the Order of the Commissioner of Central Excise. It is held that the Appellants will be entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in the case of Bajaj Tempo and Jindal Polymers. 3. Apart from the above two decisions, we also note that identical view was taken in the case of Shakti Insulated Wires Ltd. v. CCE & C, Mumbai-V [2002 (149) E.L.T. 668 (Tri.) = 2002 (51) RLT 115 (CEGAT-Mum)] & also in the case of CCEx, Jaipur v. Noorani Textiles Mills [2000 (122) E.L.T. 744 (Tribunal)]. 4. In only case of Escorts Ltd. v. CC Ex, Delhi (2003 (160) E.L.T. 623 (Tri-Del.)] while interpreting Rule 57C of the Central Excise Rules, the Tribunal rejected the appellants claim of Modvat credit of duty paid on the inputs used in the manufacture of the parts, which were cleared without payment of duty to, appellant's other unit under Chapter X procedure and utilised in the manufacture of tractor which were cleared on payment of duty by observing that since no duty was paid on the part at the time of clearance, Rule 57C will apply and no Modvat credit would be admissible. However, the said decision was subsequently reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference in favour of the assessee. The papers may be placed orders. before the original Bench for passing the appropriate orders." 9. The Tribunal in the case of Deccan Alloys Pvt. Ltd. Vs CCE Chennai (supra), had considered the very same issue in which the facts are almost similar. Relevant para of the Final Order reads as under : "7. The show cause notices from which the proceedings are initiated have found fault with the appellants for not having maintained separate accounts for common input (furnace oil) on the ground that such input is being used in the manufacture of dutiable goods manufactured on the appellant's own goods and goods manufactured on job work for principal manufacturer. No duty has been discharged by appellants. The adjudicating authority has found merit with the arguments of appellants that Notification No.214/86-CE is not an exemption Notification but it is merely postponing payment of duty at the time and removal of finished goods by principal manufacturer. However having come to this conclusion, the adjudicating authority has held that there is yet another condition that input should be used by manufacturer of final products, and has held that since ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of clearance from the premises of the job worker, the same is to be reckoned from the date of clearance by the principal manufacturer (the person who supplied material to the job worker for the purpose of getting job work done). To consider this notification as an unconditional notification and to hold that the job worker-appellant should not have paid the duty may not be appropriate. 10.3 There is another reason for not forcing any job worker to avail the benefit of Notification No. 214/86-C.E., dated 25-3-1986. The job worker is not expected or required to know the nature of disposal of job-worked goods sent by him to the supplier. The condition regarding payment of the duty on the final products manufactured using job-worked items sent by the job worker is to be fulfilled by the principal manufacturer. The job worker cannot be expected to compel the principal manufacturer to take over the responsibility of payment of duty on the job-worked items. Unless the supplier of the raw materials or semi-finished goods gives an undertaking to the jurisdictional central excise authority in charge of the job worker for discharging the liabilities in respect of Central Excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
