2010 (12) TMI 1029 - HC - Central Excise

Job work - Demand - assessee cleared S.S. Flats falling under sub-heading No. 7220.10 of Central Excise Tariff Act 1985 without payment of duty in terms of the Notification No. 42/2001-C.E. (N.T.) dated 26-6-2001 for conversion into S.S. Cold Rolled Patta on job work basis - Adjudicating Authority observed that the assessee had not procured excisable goods under the relevant provisions and hence applicability of the provisions of Rule 19(2) and 19(3) as well as Notification dated 26-6-2001 was ruled out - Held that - Goods were removed by the assessee under Bond with the permission of the Department and then after processing the goods were cleared for export; and the final product has been exported. The suggestion as made in this appeal that at each stage a final product came into existence neither appears to be in conformity with the record nor seem to have been suggested before the Appellate Commissioner or the Tribunal Commissioner cannot be faulted in setting aside the order dated 27-4-2005; and the Tribunal has also rightly dismissed the appeal filed by the Revenue appeal dismissed.

Summary

Issues:
1. Appeal challenging the Final Order dated 3-10-2007 passed by the Tribunal.
2. Clearance of S.S. Flats without payment of duty for conversion into S.S. Cold Rolled Pattas and subsequently into S.S. Utensils.
3. Dispute regarding the application of Notification No. 42/2001-C.E. (N.T.) dated 26-6-2001.
4. Allegation of improper procedure followed by the assessee.
5. Appeal by Revenue against the order of the Appellate Commissioner.
6. Contention regarding the export of the final product and duty implications.
7. Interpretation of the Board's Circulars and relevant case laws.
8. Decision on whether the demand for duty is sustainable.

Analysis:
1. The appellant-Revenue challenged the Final Order dated 3-10-2007 passed by the Tribunal under Section 35-G of the Central Excise Act, 1944. The dispute arose from the clearance of S.S. Flats without duty payment for further processing into S.S. Cold Rolled Pattas and S.S. Utensils, leading to a demand of Rs. 3,47,356/- by the Adjudicating Authority.

2. The Appellate Commissioner allowed the appeal, noting that the goods were removed under Bond with department permission and subsequently exported. The Commissioner relied on Board's Circulars to support the clearance process followed by the assessee, setting aside the demand for duty.

3. The Tribunal upheld the Commissioner's decision, emphasizing that the final product was exported, making the duty inapplicable. The Tribunal rejected the Revenue's appeal, stating that the proper procedure was followed, and the final product's exportation was undisputed.

4. The Revenue contended that the procedure was not followed correctly and that the Board's circular did not apply to the complete manufacture of goods by job workers. However, the Court found no merit in the Revenue's appeal, affirming the findings that the goods were removed under Bond, processed, and exported, justifying the decision to set aside the demand for duty.

5. The Court concluded that the findings on facts supported the decisions of the Appellate Commissioner and the Tribunal, dismissing the Revenue's appeal. The Court held that the goods were cleared for export after proper procedures and permissions were followed, making the demand for duty unsustainable.

6. In summary, the Court upheld the decisions of the lower authorities, emphasizing that the goods were exported after being processed and cleared under Bond with department permission. The Court found no fault in setting aside the demand for duty, leading to the dismissal of the Revenue's appeal.