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TMI Blog2009 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said products, a bye product Hydrochloric Acid emerges. The job workers did not return the bye product Hydrochloride Acid and cleared the same without payment of duty. The appellant paid the applicable Central Excise duty with interest. However, on adjudication and appeal proceedings, the penalty of Rs. 3,07,173/- under Section 11AC was imposed. The appellants are in appeal against the impugned order confirming the penalty. 2. Heard both the sides. Shri Piyush Sargoi, Ld. Chartered Accountant on behalf of the appellants submitted that there is no obligation on the principal manufacturer to bring back scrap generated at the job workers end or pay the Central Excise duty on the scrap after 31-3-2000, in view of the amended Rule 57AC of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) which requires return of inputs or raw material within 180 days, failing which, Cenvat equivalent to duty is to be paid. This confirms that duty is to be paid by the manufacturer, not the job worker, even though the latter is undertaking processes amounting to manufacture. (C) As a logical extension, if any scrap or byproduct arises at the job worker's premises, instead of returning it to the manufacturer, the law permits clearance directly from the job worker's premises; on payment of duty by the job worker, on behalf of the manufacturer. Similarly, following the same principle of law, any other product which arises during the manufacturing process in the job worker's factory can be cleared by the job worker on payment of duty on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by the job worker or by the principal manufacturer, then their principal manufactures or the raw material suppliers are duty bound to follow or comply with Notification No. 83/94-Central Excise, dated 11-4-94. If they do not want to comply with the Notification, then the liability is on them to pay Central Excise duty and not on the job worker. The job worker in his own right he may be an independent manufacturer, but as far as these raw materials are concerned his job is only to convert them and to send them back to the principal manufacturer. The liability of the principal manufacturer cannot be extinguished on the ground that the relationship between the appellant and the principal manufacturer is on a principal-to-principal basis. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Central Excise, Pune-II - 2004 (173) E.L.T. 26 (Tri) This case is based on the decision of International Tobacco Company Limited - 2004 (165) E.L.T. 314 (Tri.) (j) International Tobacco Co. Ltd. v. Commissioner of Central Excise, Ghaziabad - 2004 (165) E.L.T. 314 (Tri.-Del.) The point at issue is explained in Para 4 "no process of manufacture has been under taken by them so as to attract the Central Excise duty". Further, "there is no provision in the Cenvat Credit Rules 2001 providing for payment of duty on waste and scrap, which has arisen during the manufacture of the finished product". Respectfully, it must be pointed out that Central Excise duty can not be levied under the Cenvat Rules, hence the Hon'ble Tribunal has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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