2009 (2) TMI 606 - AT - Central Excise

SSI Exemption - Job work - benefits under Notification No. 83/94, 84/94 and 03/2001 - denial of exemption on the ground that appellant did not follow the proper procedure

Summary

Issues:
1. Eligibility for benefits under Notification No. 83/94, 84/94, and 03/2001.
2. Compliance with procedure and conditions prescribed in the Notifications.
3. Responsibility for filing declaration in case of job workers.
4. Imposition of penalties under Rule 25 of the Central Excise Rules 2001.
5. Interpretation of Notifications and procedural requirements.
6. Dispute over non-filing of declaration by the principal manufacturer.

Analysis:
1. The appeal pertains to the eligibility of the respondents for benefits under Notification No. 83/94, 84/94, and 03/2001, despite alleged non-compliance with prescribed procedures and conditions. The Revenue challenged the Commissioner (Appeals) order granting benefits to the respondents.

2. The Revenue contended that strict construction of Notifications is required, emphasizing the need for fulfilling procedural requirements. Citing the Supreme Court decision in Eagle Flask Industries Limited, it argued that filing a declaration is not a mere formality. In contrast, the respondents' advocate argued that the responsibility for filing declarations rested with the principal manufacturer, not the job workers.

3. The Tribunal analyzed the case concerning spare parts cleared under SSI Notification No. 83/94 and components for PD Pumps under Notification No. 3/2001. It was noted that while the principal manufacturer failed to file an undertaking, there was no dispute about the goods' eligibility for the Notification. The Tribunal agreed with the Commissioner (Appeals) that the respondents were entitled to benefits despite the procedural omission.

4. Regarding components for PD Pumps, the Tribunal referred to a previous decision where non-compliance with Chapter-X procedure alone should not lead to benefit denial. The Tribunal upheld the substantial compliance by the job worker and principal manufacturer in accounting for goods, rejecting the Revenue's appeal.

5. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the eligibility of the respondents for the benefits under the Notifications. The cross objections were also disposed of in light of the detailed analysis and findings presented.

This comprehensive analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's reasoning leading to the final decision.