2010 (8) TMI 363 - AT - Central Excise

SSI Exemption - Where the respondent independently manufactured final products on their own and cleared the same, it might be open to them to claim SSI benefit by satisfying the relevant conditions of the SSI Notification. This benefit cannot be claimed in respect of any final product or resultant scrap arising under job work, to which the provisions of Rule 57F(3) to Rule 57F(5) would apply in so far as the period of dispute is concerned. The respondent was not entitled to claim the benefit of Nil rate of duty in respect of the scrap which was generated from the job work done for the benefit of their customer. They were liable to pay appropriate duty on the scrap in terms of Rule 57F(5), which they paid belatedly.

Issues:
1. Appeal by Revenue against decision setting aside Order-In-Original.
2. Dispute over duty payment on scrap and amortized value of dies/moulds.
3. Allegations of suppression of material facts to evade duty payment.
4. Imposition of penalties under Section 11AC and Rule 173Q.
5. Claim of SSI benefit on scrap generated during job work.
6. Applicability of Rule 57F(5) regarding payment of duty on scrap.
7. Correctness of penalties imposed by the original authority.
8. Refund obtained by respondent based on appellate Commissioner's order.
9. Correctness of demand for interest under Section 11AB.

Analysis:
1. The appeal before the Appellate Tribunal arose from the Revenue's dissatisfaction with the lower appellate authority's decision to set aside the Order-In-Original. The dispute centered around the duty demand on the amortized value of dies/moulds and scrap generated during job work, totaling Rs. 79,230/-.

2. The Revenue contended that the respondent had not paid appropriate duty on the scrap, clearing it at a 'Nil' rate under SSI Notification No. 8/99. They argued that the non-inclusion of amortized value in assessable goods and suppression of facts justified invoking Section 11A(1) proviso for duty recovery and penalties under Section 11AC and Rule 173Q.

3. The respondent, in their 'cross objections,' claimed entitlement to SSI benefit on the scrap, citing filed declarations and audits. They disputed the duty amount demanded and highlighted obtaining a refund post the appellate Commissioner's order.

4. The Tribunal found that duty on dies/moulds and scrap was paid by the respondent before the show-cause notice. The adjudicating authority overreached by demanding a higher duty amount than in the notice. Penalties under Section 11AC and Rule 173Q were discussed, with Section 11AC applicable for the penalty period from 28-9-1996.

5. The Tribunal rejected the respondent's plea for SSI benefit on the scrap, stating it was generated under job work, not independently manufactured goods. The respondent was liable to pay appropriate duty under Rule 57F(5).

6. The final order affirmed the duty liability, vacated the penalty under Rule 173Q, directed a correct penalty determination under Section 11AC, and upheld interest payment under Section 11AB from 28-9-1996 till actual duty payment.

This detailed analysis encapsulates the legal intricacies and findings of the Appellate Tribunal's judgment, addressing each issue comprehensively while maintaining the essence of the original text and legal nuances.

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