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2008 (5) TMI 513 - AT - Central Excise
Issues involved: Appeal against demand of duty on automobile parts manufactured on job work basis for M/s. Madras Radiators and Pressings Ltd., denial of benefit of Notification No. 214/86-C.E. due to non-observance of Rule 57F(3) procedure, imposition of penalty on the job worker, compliance with conditions of exemption notifications.
Summary: 1. The appeal was filed by the Revenue against the lower appellate authority's decision to set aside a demand of duty on automobile parts manufactured on job work basis for M/s. Madras Radiators and Pressings Ltd. The dispute arose as M/s. MRP did not issue Rule 57F(3) challans to the job worker for the raw materials supplied by M/s. Steel Authority of India Ltd. The department demanded duty from the job worker, denying them the benefit of Notification No. 214/86-C.E. The appellate authority found that the job worker had substantially complied with the procedure, as the goods were cleared under delivery challan and received by M/s. MRP, who paid duty by utilizing input-duty credit. 2. The Revenue contended that the goods cleared by the job worker should be held dutiable due to the lack of strict compliance with Rule 57F(3) and Notification No. 214/86-C.E. The appellant relied on case law emphasizing strict compliance with exemption notification conditions. The learned SDR reiterated these grounds of appeal. 3. There was no representation for the respondents, as the notice issued to them was returned undelivered. 4. Upon reviewing the impugned order and the grounds of appeal, the Tribunal found no valid reason to interfere with the lower authority's decision. The main issue was whether the job worker should be denied the benefit of Notification No. 214/86-C.E. due to technical non-compliance with Rule 57F(3). The Tribunal agreed with the lower authority that there was substantial compliance with the procedure, and the job worker was not liable to pay duty on the job worked goods. It was noted that M/s. MRP had paid duty after taking Modvat credit on the inputs, and most findings by the Commissioner (Appeals) were not challenged. Apart from minor defects, the overall compliance with the exemption law for job workers was upheld. 5. Consequently, the Tribunal upheld the impugned order, dismissing the appeal filed by the Revenue.
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