2002 (12) TMI 475 - AT - Central Excise

Summary

Issues: Duty payment by job worker, procedural violations, imposition of penalty

Duty Payment by Job Worker:
The case involved appeals against an Order-in-Appeal where the duty paid by the primary manufacturer on goods manufactured by the job worker was not accepted. The primary manufacturer sent raw materials to the job worker, got goods manufactured, and paid duty on them. The Additional Commissioner confirmed duty amounts on both appellants, stating the job worker should have paid the duty. The department confirmed duty payment by the primary manufacturer on goods manufactured by the job worker. However, the department argued that the job worker did not pay duty as required by the Central Excise Rules due to procedural violations. The Tribunal noted the duty paid by the primary manufacturer and job worker, finding no grounds to sustain the impugned orders.

Procedural Violations:
The department alleged procedural violations by the primary manufacturer for not following Rule 57F(3)/57F(4) procedures and taking Modvat credit on unused inputs. The department contended that the job worker did not pay duty as required by the rules due to the primary manufacturer's procedural lapses. The Tribunal acknowledged the technical nature of the violations, stating they were not substantive. The Tribunal found no basis for imposing penalties on the appellants for these technical violations, ultimately allowing the appeals and setting aside the impugned orders.

Imposition of Penalty:
The Additional Commissioner had imposed penalties on the appellants under Section 11AC of the Central Excise Act, 1944, and Rule 173Q of the Central Excise Rules, 1944. However, the Tribunal ruled that no penalties could be imposed for the procedural violations, considering them technical and not substantive. As a result, the Tribunal allowed the appeals, setting aside the penalties along with the impugned orders, providing consequential relief if necessary.