2017 (6) TMI 424 - AT - Central Excise

Whether appellants are liable to pay duty on the processed loss occurred during job work? Held that - Section 3 of the CEA, 1944 stipulates that duty is to be levied on the goods manufactured and that there is no provision for charging duty on invisible losses - the issue whether appellant is liable to pay duty on the burning loss occurred in the job worker unit has been well settled in favor of the assessee in their own case - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether appellants are liable to pay duty on the processed loss occurred during job work.

Analysis:
The appellants, manufacturers of Copper Anode, sent the anode to a job worker for conversion into Copper Cathode and Continuous Copper Rod without paying duty. The duty for the final products was discharged at a different location. The Commissioner of Central Excise imposed a condition that the appellants are liable to pay duty on any loss during the manufacturing process by the job worker. A show cause notice was issued for duty demand, interest, and penalty, which was confirmed by the adjudicating Commissioner. The appellants appealed to the Tribunal, arguing that similar issues in other periods had been decided in their favor. The Revenue reiterated the findings, but a letter confirmed that the department had accepted previous decisions in favor of the appellants. The Tribunal found that the issue of duty on process loss had been settled in favor of the appellants in previous judgments. The condition imposed by the Commissioner regarding duty payment on losses was analyzed, concluding that invisible losses not insurable were not covered. The demand for duty and interest was deemed incorrect and unsustainable. The Tribunal set aside the impugned order, allowing the appeal.

This judgment clarifies the liability of appellants to pay duty on process loss during job work. It highlights the importance of previous decisions in similar cases and the interpretation of conditions imposed by the authorities. The Tribunal emphasized that duty is levied on manufactured goods, excluding invisible losses, and that the demand for duty and interest was not legally sustainable in this case. The decision was based on a thorough analysis of the law and previous judgments, ultimately ruling in favor of the appellants due to the settled nature of the issue and the acceptance of previous decisions by the department.