2009 (6) TMI 732 - AT - Central Excise

Benefit of N/N. 214/86-C.E. dated 2-4-86 - Job work - denial on the ground that the man-made fabrics are not covered by the Notification - Held that - the decision in the case of M/s. Trico Process Pvt. Ltd. v. CCE Mumbai 2005 (5) TMI 152 - CESTAT MUMBAI squarely covers the issue where the duty demand on the job worker is set aside especially where the laminated fabrics have been received back by the input supplier; if the fabrics have not been received back the principal manufacturer is required to reverse the credit and the job worker will be liable to duty on the laminated fabrics on his own liability. For the fabrics received back by the principal manufacturer the liability to duty will be on him with benefit of credit on inputs. - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of benefit under Notification No. 214/86-C.E. to a job worker processing man-made fabrics.
2. Imposition of duty and penalty on the appellant.

Analysis:
1. The appellant, a job worker processing man-made fabrics, was denied the benefit under Notification No. 214/86-C.E. The issue revolved around whether the man-made fabrics processed by the appellant were covered by the said notification. The appellant argued that previous Tribunal decisions supported their eligibility for the benefit if the goods were processed following specific provisions. They cited the case of M/s. Trico Process Pvt. Ltd. v. CCE, Mumbai, emphasizing that duty cannot be demanded from the job worker if the processed goods are returned within the stipulated period. The appellant contended that the onus of duty liability on processed inputs should not be on the job worker but on the principal manufacturer. On the contrary, the JDR argued that the goods in question were not covered by the job work notification and referred to the decision in the case of M/s. Sony India Ltd. and M/s. Desh Rolling Mills by the Tribunal and the Supreme Court, respectively.

2. The Tribunal analyzed the submissions from both sides. It noted that the decision in M/s. Sony India Ltd. by the Supreme Court was not relevant to the job work issue at hand. Additionally, the Tribunal's decision in M/s. Desh Rolling Mills highlighted that the benefit under Notification No. 214/86-C.E. could only be claimed by a job worker if the raw material supplier fulfilled the notification's requirements. The Tribunal found that the decision in M/s. Trico Process Pvt. Ltd. supported the appellant's case, along with other similar decisions. Consequently, the Tribunal allowed the appeal, providing consequential relief to the appellant, thereby overturning the denial of benefit and the imposition of duty and penalty.

This detailed analysis showcases the legal arguments, interpretations of relevant notifications, and the Tribunal's reasoning in arriving at the decision to grant relief to the appellant.