2015 (10) TMI 1140 - AT - Central Excise

Duty demand - Benefit of notification No. 7/97-CE dated 01.02.97 - Held that - when TAPL becomes liable to duty, then such liability in its hands should be determined in accordance with law following the due process of natural justice. Therefore, if a limited remand of the matter is made to determine the assessable value of the ingots, then there may not be difficulty to work out duty liability of TAPL. Ld. Counsel at this stage says that ld. adjudicating authority upon remand shall examine applicability of notification No. 214/86-CE dated 25.03.86 TAPL. So also he has to examine applicability of notification No. 7/97-CE dated 1.3.97. Ld. adjudicating authority shall accordingly do well to examine this aspect during re-adjudicating the matter of TAPL. - Decided in favour of assessee.

Summary

Issues: Applicability of Notification No. 7/97-CE dated 01.03.97 on duty liability for ingots manufactured by a job worker.

Analysis:
1. The appellant, a manufacturer of bars and rods, sourced ingots from a job worker. The appellant cleared goods duty-free under Notification No. 7/97-CE dated 01.03.97, which required the inputs to have undergone duty.
2. The dispute arose as the Revenue alleged that the ingots supplied by the job worker did not suffer duty, impacting the appellant's entitlement to the duty exemption.
3. The adjudication orders for both the appellant and the job worker were interconnected due to the duty liability on the ingots. The job worker used inputs from the appellant to manufacture ingots, which transformed into a dutiable product.
4. It was acknowledged by both parties that duty should be levied on the ingots manufactured by the job worker, holding them liable for duty payment.
5. The appellant's counsel proposed a limited remand to determine the assessable value of the ingots for the job worker, ensuring a fair process following natural justice principles and examining the applicability of relevant notifications.
6. The Tribunal allowed the appeal of the appellant, with consequential relief to follow as per the law. The appeal of the job worker was remanded to the adjudicating authority to determine its liability based on the issues identified, granting a fair hearing and a reasoned order.

This judgment clarified the duty liability concerning ingots manufactured by a job worker and the applicability of duty exemptions under specific notifications. The interconnected nature of the cases highlighted the importance of determining duty liability accurately and following due process. The decision emphasized the need for a fair assessment of assessable value and the thorough examination of relevant notifications to ensure compliance with the law.