2008 (6) TMI 480 - AT - Central Excise

Summary

Issues: Duty credit on aluminium ingots supplied to job workers for manufacturing aluminium shots.

Analysis:
1. The appellants supplied aluminium ingots to job workers who manufactured aluminium shots and returned them for further use. The duty on aluminium ingots was paid, but no credit was taken by either the appellants or the job workers. The appellants claimed to have given the necessary intimation under Rule 57F(2) for the job work. However, instead of taking credit for the duty paid on aluminium ingots, they took deemed credit for the aluminium shots. An audit objection was raised against this deemed credit as the shots were exempted if made from duty-paid ingots under Notification 180/88-C.E. dated 13th May, 1988.

2. The Tribunal noted that the duty rates on aluminium ingots and shots were the same, both falling under "Unwrought Aluminium." The appellants were eligible for credit on the duty paid for the ingots. The quantity of shots produced from the ingots could not exceed the ingot quantity, making the deemed credit on shots equivalent to the credit available on the ingots. Therefore, the Tribunal concluded that it was a revenue-neutral situation as the appellants did not claim more credit than due for the duty on the ingots. Consequently, the impugned order was set aside, and the appeal was allowed.

This judgment clarifies the eligibility of duty credit on aluminium ingots supplied to job workers for manufacturing aluminium shots, emphasizing the equivalence between the credit available on ingots and the deemed credit on shots. The decision ensures a revenue-neutral outcome and highlights the importance of complying with notification requirements for claiming credits in such scenarios.