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TMI Blog2024 (7) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... nt bare steel pipes to M/s. Zebra Marketing, Ahmedabad for cement coating on the pipes as the appellant M/s. Welspun Corp. Limited does not have necessary facility of cement coating at their premises. After getting cement coating done on the steel pipes from the job worker, the appellant has cleared cement coated pipes under exemption Notification No. 6/2006-CE dated 01.03.2006 directly from the job worker's premises. The job worker namely M/s. Zebra Marketing has charged service tax on the cement coated pipes which were cleared by the appellant under Notification No. 6/2006-CE. The department is of the view that activity undertaken by the job worker that of cement coating on the steel pipes amounts to manufacture as per clause (5) of the Chapter note 73 of Central Excise Tariff Act, 1985 hence the job worker is not liable to charge and pay any service tax on such activity. The department is of the view that under the definition of Business Auxiliary Service, the activities which amount to manufacture are specifically excluded from the definition of Business Auxiliary Service. The department is of the view that that the availment of Cenvat credit by the appellant amounting to Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of said clearance as provided under Rule 6(3)(i) of Cenvat Credit Rules, 2004. 4. We have also heard the learned AR who reiterated the findings as given in the impugned order-in-original. 5. We find from the record that appellant has been clearing cement coated pipes from the premises of the job work namely M/s. Zebra Marketing on payment of duty as well as by availing the benefit of exemption under Notification No. 6/2006-CE. It is matter of record that since the appellant have availed credit of common input services which have been used both in the manufacture of dutiable and exempted goods and have not maintained separate accounts with respect to dutiable and exempted goods as required under Rule 6(2) of the Cenvat Credit Rules, 2004 they have paid an amount equal to 6% of the value of exempted goods cleared by them, as provided under Rule 6(3)(i) of Cenvat Credit Rules, 2004. With regard to the question whether the appellant is entitled to avail Cenvat credit of the service tax paid by the job worker for the activity which amounts to manufacture and thus falls beyond the scope of definition given for Business Auxiliary Service. We find that the matter has already been deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department was of the opinion that the value of the final product was depressed, it could have charged the original manufacturer unit in under-invoicing their product. This was however, not done. Valuation was duly approved and the payment of duty was also accepted. The Tribunal further observed that "We find absolutely no substance in the attempt of the learned Commissioner to convert a part of the duty so paid into deposit of duty. There is no legal basis for such presumption. The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit." This Tribunal in the case of Aarti Industries Limited vs. CCE - 2023 (5) TMI 77-CESTAT Ahmedabad has also taken the similar view. The relevant extract is reproduced below:- " 7. The appellant had been issued Advance Authorization and since they did not use those Advance Authorization for duty free import of inputs, they got the same invalidated and obtained invalidation letters in favour of certain domestic suppliers for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a show cause notice was issued to the appellant alleging that as the supplier of goods was not established that they have not procured indigenously inputs manufactured the goods supplied to the appellant. Therefore, the duty is not payable by the supplier under Serial No. 3 of the Notification. In that circumstance, the appellant is not entitled to avail 100% credit of duty paid by the supplier. The matter was adjudicated, the demand was confirmed along with interest and penalty was also imposed on the appellant. Aggrieved from the said order, the appellant is before me. 3. The ld. Counsel for the appellant submits the fact that the supplier has paid duty under Serial No. 3 of Notification 23/2003-C.E. is not disputed. In that circumstances, whatever the duty has been paid by the appellant is entitled for Cenvat credit as per Rule 3 of the Cenvat Credit Rules, 2002. Therefore, the impugned order is to be set aside. 4. On the other hand, the ld. AR opposed the contention of the ld. Counsel and submits that as per Rule 14 of the Cenvat Credit Rules, 2004 duty cast on the appellant that they have to verify supplier of the goods (in case of 100% EOU) that EOU has manufactured the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorrect and the same is liable to be reversed. Para 9 of the SCN also alleges contravention of the provisions of CENVAT Credit Rules, 2004 as the said credit was availed by the assessee in respect of exempted goods." 8. It can be seen that the respondent assessee in this appeal, in their written submission dated 09.06.2014, as mentioned in the order-in-original, stated as follows:- "(c) They have made clearances from the premises of job worker on payment of duty as also made clearances without payment of duty. In respect of clearances made without payment of duty in terms of Notification No. 6/2006-CE dated 01.03.2006, they have reversed, an amount of 6% of the value of the said clearance in terms of Rule 6(390) while in respect of clearances without payment of duty in terms of Notification No. 108/95-CE dated 28.08.1995, no such reversal under Rule 6(3)(1) was warranted by virtue of Rule 6(6)(iv). They also submitted Exhibit 'A' which shows clearance of cement coated pipes from the job worker premises on payment of duty as well as under exemption Notification No. 6/2006-CE ibid during the period from 2008-09 (January 2009) to 2012-13 (upto December 2013), Exhibit ' ..... 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