2003 (12) TMI 551 - AT - Central Excise

Summary

Issues:
Interpretation of Notification 58/97 regarding deemed credit for duty paid on inputs received by a job worker from the manufacturer.

Analysis:
The appellant, a job worker in the manufacture of steel structurals, received raw materials from Tata Projects Ltd and claimed deemed credit under Notification 58/97. The notification allows credit of duty paid on inputs at 12% of the price declared by the manufacturer in the invoice. The dispute arose as the payment for the goods was made by Tata Projects Ltd, not the appellant. The Assistant Commissioner and the Commissioner (Appeals) denied the credit and imposed a penalty. The main issue was the interpretation of Paragraph 5 of the notification, which states that the payment of duty must be made directly by the manufacturer of the final product to the manufacturer of the inputs.

The appellant argued that the condition in Paragraph 5 is procedural and not substantive. They relied on a Tribunal decision in Shiv Agrico Implements Ltd. v. CCE, which held that non-compliance with this condition could be condoned. The appellant also challenged the invocation of the extended period of limitation, stating that they had nothing to gain by suppressing the fact. The departmental representative tried to distinguish the Tribunal's decision but failed to convince.

The Tribunal, in a detailed analysis, upheld the appellant's contentions. Referring to the previous decision, the Tribunal concluded that the condition in Paragraph 5 is procedural and should not prevent a job worker or a person captively utilizing inputs from taking credit. The Tribunal emphasized the need to interpret the notification in a manner that ensures justice and avoids hardship. Therefore, the appellant was deemed entitled to take credit under Notification 58/97. Consequently, the appeals were allowed, and the impugned order was set aside.