2008 (2) TMI 382 - HC - Central Excise

Strictures against department department is making attempt to recover the demand by any means i.e. by hook or crook demand from both job-worker and principal - tribunal has set aside the demand raised against job-worker subsequently department proceeding against principal-respondent and by invoking extended period held that approach of department is not correct revenues appeal dismissed no question of law arise

Summary

Issues:
1. Appeal under Section 35G of the Central Excise Act, 1944 against order passed by the Customs, Excise & Service Tax Appellate Tribunal.
2. Allegation of irregularly availing Modvat credit.
3. Tribunal setting aside demands against job worker based on a previous judgment.
4. Revenue initiating proceedings against the manufacturer after losing the case against the job worker.
5. Interpretation of liability to pay duty on inputs used in manufacturing goods on a job work basis.

Analysis:
The judgment pertains to an appeal under Section 35G of the Central Excise Act, 1944, against an order passed by the Customs, Excise & Service Tax Appellate Tribunal. The case involves allegations of irregularly availing Modvat credit by the respondent-company during a specific period. The tribunal had initially set aside the demands against the job worker based on a previous judgment in the case of M/s. Xpro (India) Ltd. v. CCE, Delhi -II. Subsequently, the revenue initiated proceedings against the manufacturer after losing the case against the job worker, leading to the present appeal by the Commissioner of Central Excise.

The tribunal, in its decision, relied on the judgment of the Apex Court in AMCO Batteries Limited v. CCE, Bangalore, regarding the liability to pay duty on inputs used in manufacturing goods on a job work basis. It observed that the revenue had first proceeded against the job worker for recovery of amounts, and only later issued a show cause notice against the manufacturer. The tribunal concluded that the approach of the revenue to recover the demand was questionable, as it seemed like an attempt to recover demands by any means, even resorting to initiating proceedings belatedly. It found no substantial question of law in the appeal and held that the order of the tribunal was legal and proper, leading to the dismissal of the appeal.

In the absence of any substantial legal issue and considering the observations made by the tribunal, the High Court, represented by T. Meena Kumari and G. Rohini, JJ., upheld the decision to dismiss the appeal. The judgment emphasized that the revenue's actions were deemed as an illegitimate attempt to recover demands, and the tribunal's order was found to be free from any illegality or infirmity. Consequently, the appeal was dismissed with no order as to costs.