2012 (12) TMI 1012 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are whether the appellant should be considered as a job worker u/s Rule 10A of Central Excise Valuation Rules, 2000 and whether the duty demand and penalties imposed on the appellant are justified.

Summary:

Issue 1: Appellant's classification as a job worker under Rule 10A
The appellant, a manufacturer of plastic moulded furniture for M/s. Neelkamal Limited, was alleged by the department to be job workers, triggering the application of Rule 10A of Central Excise Valuation Rules. The Commissioner upheld this view, leading to duty demands and penalties. However, the appellant argued that they were not job workers as per the agreement terms, citing the agreement clauses and a relevant tribunal judgment. The Tribunal found that the appellant purchased raw materials themselves, not supplied by M/s. Neelkamal Limited, thus not meeting the job worker criteria under Rule 10A. The Tribunal agreed with the appellant's stance and waived the pre-deposit requirement for the appeal.

Issue 2: Justification of duty demand and penalties
The department contended that the appellant's real intent was to act as job workers based on specific clauses in the agreement. However, the Tribunal analyzed the agreement clauses and determined that the appellant's actions did not align with the job worker definition under Rule 10A. The Tribunal found in favor of the appellant, allowing the appeal and staying the recovery of the demanded duty, interest, and penalties until the appeal's disposal.

In conclusion, the Tribunal ruled in favor of the appellant, determining that they were not job workers as per Rule 10A and waiving the pre-deposit requirement for the appeal. The stay applications were allowed, and the appeals were scheduled for further proceedings.