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2008 (11) TMI 497 - AT - Central Excise
Issues:
Assessment under Rule 4(5) of Cenvat Credit Rules, 2004 and exemption under Notification No. 214/86, dt. 25-3-86 for job worker. Analysis: The appellant objected to the assessment on two grounds. Firstly, they argued that as per Rule 4(5) of Cenvat Credit Rules, 2004, no duty payment is required from them as it is recoverable from the final product manufacturer. Secondly, they claimed exemption under Notification No. 214/86, dt. 25-3-86, which places the appellant in Col. 1 of the table exempting job workers from duty payment. The appellant contended that the failure of the raw material supplier to provide an undertaking should not disqualify the job worker from the duty exemption. They relied on previous tribunal decisions to support their argument. The Department, however, disagreed, citing para 2 of the Notification as the basis for denying the exemption claimed by the appellant. The Tribunal carefully examined Rule 4(5) of the Cenvat Credit Rules, 2004 and Notification 214/86, dt. 25-3-86. They emphasized the need for a strict construction of para 2 of the Notification and considered it a regulatory provision. The Tribunal acknowledged the requirement of giving an undertaking as per para 2(i) of the Notification, which imposes responsibility on the undertaker to discharge duty liability on the final product. They highlighted the necessity for factual verification and legal scrutiny regarding any violation leading to exemption denial. Despite differing views, the Tribunal found prima facie support for the appellant in previous decisions and ruled in favor of the appellant by directing no recovery of the demand during the appeal's pendency. In conclusion, the Tribunal allowed the Stay petition, indicating a temporary halt to the recovery process during the appeal proceedings. The decision was made after a thorough examination of the legal provisions, notifications, and arguments presented by both parties, ensuring a fair and reasoned judgment in favor of the appellant.
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