2017 (2) TMI 976 - AT - Central Excise

Job-work - Rule 4 (5) (a) of the CCR - Rule 57 F (4) - whether the principal manufacturer is permitted to send inputs to his job worker and get back the processed goods for subjecting such processed goods to further processes and clearing the final product on payment of duty? - whether both the Rules mentioned above are not pari materi? - Held that - Reliance was placed in the case of GAYATRI TEXTILES Versus COMMISSIONER OF CENTRAL EXCISE, SALEM 2005 (6) TMI 332 - CESTAT, CHENNAI , where it was held that The new Rule 4(5) ibid seems to be, by and large, pari materia with the old Rule. Under both these rules, principal manufacturer is permitted to send inputs to his job worker and get back the processed goods for subjecting such processed goods to further processes and clearing the final product on payment of duty. The ld. Commissioner (Appeals) has rightly extended the benefit to the assessee - appeal dismissed - decided against Revenue.

Summary

Issues: Assessable value determination for goods manufactured on job work basis under Rule 4(5) of Cenvat Credit Rules.

In the present case, the appellant initially manufactured Pipe Diffuser Complete Assembly (PDCA) and paid Central Excise duty on the assessable value. Subsequently, they shifted to manufacturing PDCA on a job work basis using components supplied by another company. The dispute arose regarding the assessable value of the goods manufactured in this manner. The Original Adjudicating Authority confirmed the demand raised, but the Appellate Authority set it aside, citing a Supreme Court decision. The Adjudicating Authority did not consider the Supreme Court decision, arguing that it was not applicable under Rule 4(5) of Cenvat Credit Rules. The Revenue reiterated this argument in their appeal, claiming that the rules were not pari materia. However, the Tribunal noted a decision where it was observed that the old rule and Rule 4(5) were similar, allowing the principal manufacturer to send inputs to a job worker and clear the final product on payment of duty.

The Tribunal analyzed the arguments presented by both sides and found that the ld. Commissioner (Appeals) correctly relied on the Tribunal and Supreme Court decisions, extending the benefit to the assessee. The Tribunal concluded that the Revenue's appeal lacked merit, and therefore, rejected it. The judgment emphasized the consistency in the application of rules and previous decisions to determine the assessable value of goods manufactured on a job work basis under Rule 4(5) of Cenvat Credit Rules.