TMI Blog2023 (11) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... der import, so any person who is engaged in any activity as specified in the clauses of section 2(f) would fall in the category of a manufacturer and would be liable to pay the excise duty unless exempted - it is opined that the activity carried out by the appellant who happens to be a job worker amounts to manufacture, more particularly when it says that the word 'manufacture' shall also include any person, who engages in their production or manufacture on his own account. From careful reading of Section 66 D(f) of the Finance Act, 1994, there is no ambiguity that the statute does not envisage levy of service tax on any process amounting to manufacture or production of goods - the payment of service tax by the appellant on the job charges collected on Die Casting of Components from Aluminium Metal was totally unwarranted and against the spirit of the law as quoted above. In fact, the appellant was required to pay central excise duty on the said activity which amounts to manufacture and was not required to pay service tax. The Notification No 214/86 has been the subject matter of interpretation in various decisions of the Tribunal as well as of the Supreme Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACOM LTD. [ 2018 (6) TMI 435 - RAJASTHAN HIGH COURT ]. The Division Bench decided the issue after considering the long line of decisions, where same issue was considered and decided infavour of the party and against the Revenue. The learned Counsel for the appellant had filed the supplementary paper book on 3rd June 2022, where at Serial No.4, he has annexed the copies of the debit notes along with the chart showing the details of the debit notes. On perusal of the debit notes, it is found that they contain all the particulars and details, as are required to be mentioned in the invoice to avail the cenvat credit. Consequently, the appellant is entitled to claim the cenvat credit and the Authorities below have erred in denying the same. Both the Adjudicating Authority as well as the Appellate Authority have rejected the claim for cenvat credit on the ground that the debit notes were not a proper document as prescribed under Rule 9 of CCR, 2004 for availing cenvat credit and, therefore, did not examine the particulars given therein in terms of Rule 4A of Service Tax Rules. Matter remanded to the Adjudicating Authority, however, in the facts of the present case, when the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NU TAMTA : Challenging the Order-in-Appeal No.DDN/EXCUS/000/APP/42/ 2020-21 dated 08.07.2020 passed by the Commissioner (Appeals), the appellant has filed the present appeal. 2. The brief facts of the case are that the appellant is engaged in the manufacture of Aluminium Alloy Die Cast Components falling under heading number 7616000 of the Central Excise Tariff Act, 1985. The process of manufacture involved was Die Casting of Components from Aluminium Metal followed by finishing through machines. An Audit of the records of the appellant for the period February, 2015 to March, 2016 was conducted and it was found that the appellant had manufactured Aluminium Die Cast Components Engine part on job work basis for M/s Rockman Industries Ltd. and took job work charges @ Rs 11 or 11.60% and paid service tax thereon. The Revenue was of the view that the process of conversion of Metal into Engine Components involved excisable goods and this manufacture/production of goods does not constitute a taxable service as defined under the Finance Act, 1994 because such manufacture or production falls under the Negative List as defined under section 66 D (f) of the Finance Act, 1994 and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case. 7. The learned Counsel for the appellant submitted that the liability to pay duty was on the principal manufacturer i.e. M/s Rockman Industries Ltd since the raw material was sent by them on job work challan. It was also their submission that the process carried out by the appellant does not emerge into marketable goods as the goods were unfinished Aluminium Casting and hence, no duty was payable thereon. The learned Counsel had also taken the plea of revenue neutral situation by submitting that even if goods were liable to duty, cenvat credit on raw material and capital goods would be available to them and duty liability on value addition would be equal to service tax paid in cash. They relied on the decision of the Rajasthan High Court and also of this Tribunal to say that cenvat credit is permissible on the basis of debit notes. Lastly, according to them extended period of limitation cannot be invoked as there is no suppression on their part. 8. The Revenue relied on the findings of the Authorities below and according to them from the process involved, it is clear that the appellant was manufacturing Pressure Die Component from Aluminium, which amounts to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all in the category of a manufacturer and would be liable to pay the excise duty unless exempted. We are therefore of the opinion that the activity carried out by the appellant who happens to be a job worker amounts to manufacture, more particularly when it says that the word 'manufacture' shall also include any person, who engages in their production or manufacture on his own account. We find it relevant to take note of the factual situation as noted by the Adjudicating Authority that they were involved in two types of transactions:- I- Firstly, to make pressure die components and sell it on payment of central excise duty to the customers, namely M/s Havells India Pvt. Ltd., M/s Onkar Engine Generator (P) Ltd etc. after availing cenvat facility provided under the CCR, 2004. II- Secondly, they were also manufacturing pressure die components from Aluminium supplied by M/s Rockman on job work basis. Taking into account the above two types of transactions, it is sufficient to hold that the process undertaken by the appellant amounts to manufacture and that is why he was paying excise duty when he was selling the same product to other companies. This also nul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he principal manufacturer, i.e. M/s Rockman, who supplied the raw material etc. and they being the job worker, were exempted from payment of duty under the Notification No. 214/ 86-CE dated 25.3.1986. We have no issue that Notification No 214/86 grants exemption to job workers from payment of duty, however, the same is subject to the condition of filing of the undertaking by the principle manufacturer. The relevant provisions of the said notification are as under : Specified goods manufactured in a factory as a job worker and used in the manufacture of final products In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods specified in column (1) of the Table hereto annexed (hereinafter referred to as the said goods) manufactured in a factory as a job work and :- (a) used in relation to the manufacture of final products, specified in column (2) of the said Table, (i) on which duty of excise is leviable in whole or in part; or (ii) for removal to a unit in a free trade zone or to a hundred per cent. export-oriented undertaking or to a unit in an Electronic Hardwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), No. 108/95-Central Excises, dated the 28th August, 1995; or . (c) removed on payment of duty for home consumption from his factory, or (d) used in the manufacture of goods of the description specified in column (1) of the table hereto annexed by another job worker for further used in any of the manner provided in clause (a), (b) and (c) as above. (ii) the said supplier produces evidence that the said goods have been used or removed in the manner prescribed above; and (iii) the said supplier undertakes the responsibilities of discharging the liabilities in respect of Central Excise Duty leviable on the final products. Explanation I. - For the purposes of this notification, the expression job work means processing or working upon of raw materials or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for the aforesaid process. Explanation II shall be omitted. (vide Notification No. 33/2000-C.E., dated 31-3-2000) Description of Inputs Description of final product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said condition of the Notification No 214/86 by the principal manufacturer has resulted into duty liability upon the job worker. Relevant paragraph of the decision of the Larger Bench is quoted hereunder : 7.6 The job worker being the manufacturer of goods is liable to pay duty on goods manufactured by him albeit on job work. The ownership of the goods is immaterial for the purpose of levy of duty and thus any person who has undertaken the activity of manufacture is liable to pay duty. In order to save the job worker from payment of duty the principal manufacturer has to own the liability to pay such duty. It is only by virtue of the Notification No. 214/86-C.E., dated 25-3-1986 that the liability of the job worker to pay duty is transferred to the principal manufacturer who undertakes to pay duty. 7.7 The intention of enactment of Notification (supra) was to shift the liability of payment of duty from job worker to the principal manufacturer under certain conditions as provided in the said notification. There is no blanket machinery provisions in the Central Excise law under which the liability to pay duty is transferred from the job work manufacturer to another pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er customers, which shows that the appellant is aware of the duty liability. On the one hand, the appellant has been taking shelter under the exemption notification to say that the liability to pay the excise duty is on the principal manufacturer but, on the other hand, he is avoiding the conditions under the Notification, whereby he would be eligible to seek exemption. The appellant cannot be allowed to pick and choose what is beneficial to him and discard the conditions specified. That the ingredients of willful suppression of facts so as to avoid the payment of central excise duty exists. The Authorities below are justified in imposing penalty under the provisions of Section 11 AC of the Act, relying on the decision of the Apex Court in the case of Chairman, SEBI Vs. Shriram Mutual Fund 2006 5 SCC 361 that mens rea is not an essential element for imposing penalty. Further, in view of the law laid down in Union of India Vs. Rajasthan Spinning and Weaving Mills 2009 (238) ELT 3 (SC) that once the ingredients to attract the provisions of Section 11 AC are attracted, the discretion to quantify the amount of penalty ends and in view thereof, the Adjudicating Authority has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of an invoice or bill or challan, which are lacking in the case of debit note. The Mumbai Bench in Mahanagar Gas Ltd. (supra) has also held that debit note is at par with the documents prescribed under Rule 9(1) of CCR, 2004 and, therefore, held that the debit note containing all the details as required under Rule 9 (2) of CCR, 2004 is a valid document for the purpose of taking cenvat credit. In VSL Steels LTD (Supra), the Tribunal took the view that one should not look at the title of the document but should rather see the contents thereof to determine its status. 16. The learned Counsel for the appellant has also relied on a latest decision of the Ahmedabad Bench in Kevin Process Technology Pvt Ltd V Commissioner of C EX., Ahmedabad 2021 (378) ELT 441, wherein the Tribunal relying on Bharti Hexacom (supra) has held that as per Rule 9 of CCR, 2004 not only invoice or bill of entry but any other document can also be valid document for availing credit and debit note containing all the details as required to be mentioned in cenvatable documents. 17. We are fully bound by the law laid down in these decisions and particularly the decision of the Rajasthan High Court in Bhart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing the Appeal of the party observed : 6. At the interest of revenue, if the adjudicating authority so chooses he may send copies of debit note relied by Assessee to the concerned jurisdictional officer for verifying whether the service tax realised by those debit notes have gone into the treasury. 18. Considering the above two decisions of this Tribunal, we could have remanded the matter to the Adjudicating Authority, however, in the facts of the present case, when the Department has not raised any objection to the debit notes in any respect, it would be a futile exercise. The documents, i.e., debit notes produced are selfexplanatory as to the details, which are required under Rule 4A of the ST Rules and, therefore, unnecessarily dragging the party all the way again to the litigation is not justifiable, moreso when the departmental authorities had adopted a very callous attitude in not considering even the contents of the documents in the light of the decisions of the Tribunal. Hence the demand of Rs 6,75,737/- along with interest and penalty is not sustainable. 19. The appellant has raised the issue of revenue neutrality referring to a latest decision of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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