2009 (1) TMI 702 - AT - Central Excise

Summary

Issues:
- Claim of SSI exemption under Notification No. 1/93.
- Treatment of goods manufactured by a job worker.
- Liability to pay duty on goods exceeding the exemption limit.

Analysis:

Claim of SSI Exemption:
The case involves the appeal filed by the Revenue against the Commissioner (Appeals) setting aside an order. The respondents, engaged in manufacturing, claimed SSI exemption under Notification No. 1/93 for clearances within Rs. 30 lakhs from duty. The Revenue contended that clearances exceeding the limit, due to goods manufactured by a job worker, necessitated duty payment. The Tribunal examined the exemption provision and relevant case law, emphasizing the distinction between clearances and removal under Rule 9(1).

Treatment of Goods by Job Worker:
A crucial aspect was whether goods valued at Rs. 16,38,700/-, manufactured by a job worker, should be included in the respondents' clearances. The Tribunal cited precedents, including Supreme Court decisions and Tribunal rulings, establishing that if a job worker produces excisable goods, the duty liability rests with the job worker. This legal principle was reaffirmed through various cases, emphasizing the responsibility of the party actually manufacturing the goods.

Liability for Duty Payment:
The Revenue argued that despite the job worker's involvement, clearances exceeding the exemption limit necessitated duty payment. However, the Tribunal, relying on legal precedents and the specific circumstances of the case, dismissed the Revenue's appeal. The decision highlighted the consistent legal position that duty liability attaches to the entity actually manufacturing the excisable goods, in this instance, the job worker. Consequently, the Tribunal upheld the Commissioner's order and rejected the Revenue's appeal, along with the cross objections supporting the initial decision.

This comprehensive analysis of the judgment highlights the core issues of SSI exemption claim, treatment of goods manufactured by a job worker, and the corresponding duty liability. The Tribunal's detailed examination of legal provisions and precedents underscores the importance of accurately attributing duty liability based on the party responsible for manufacturing excisable goods, ultimately resulting in the dismissal of the Revenue's appeal.