2017 (7) TMI 845 - AT - Central Excise

Job-work - N/N. 214/86-CE - Revenue entertained a view that the electrical stampings are also being used by the appellant in the manufacture of PD pumps, which are exempted. As such, the assessee is required to pay duty on electrical stampings, as the same were got manufactured by them from the job workers who cleared them without payment of duty. Inasmuch as the PD pumps are exempted, the appellant is required to pay duty on the electrical stampings - Held that - The dispute herein relates to the factual position - it is not clear as to what are the quantities of raw materials sent by the appellant in terms of N/N. 214/86, i.e. whether all raw materials dispatched were covered or only the raw materials sent for conversion into stampings which are to be used in fans. It is also seen that the notification contemplates execution of bond to cover such goods. It is necessary that the factual position as to what were the quantities of raw materials covered under the notification is required to be ascertained and a fresh order passed on that basis - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of Notification No.214/86-CE regarding duty liability on electrical stampings used in the manufacture of PD pumps and fans.
2. Dispute over whether stampings used in PD pumps were manufactured in compliance with the notification.
3. Assessment of duty liability on stampings used in PD pumps cleared without payment of duty.

Analysis:
1. The case involved a dispute over duty liability on electrical stampings used in the manufacture of PD pumps and fans. The appellant contended that the stampings were manufactured by job workers under Notification No.214/86-CE and received without duty payment for use in fans cleared with duty payment. However, the Revenue argued that as the PD pumps were exempted, duty was applicable on the stampings. The Tribunal found discrepancies in the assessment and remanded the case for factual verification.

2. The Tribunal's initial order highlighted the need to ascertain the quantities of raw materials sent under the notification and whether the stampings for PD pumps were manufactured in compliance with the notification. Despite the remand, the lower authorities failed to examine the factual position and confirmed duty demand based on a legal issue. The appellant maintained that the stampings for PD pumps were not manufactured under the notification, shifting duty liability to the job worker if not compliant.

3. The crux of the matter was the factual verification of whether the stampings used in PD pumps were independently manufactured by job workers without following Notification No.214/86-CE. The appellant expressed readiness to prove the stampings' non-compliance with the notification, emphasizing the need for a factual examination. Consequently, the Tribunal set aside the impugned order and remanded the case for adjudication to establish the stampings' manufacturing process for PD pumps.

In conclusion, the judgment focused on the correct application of duty liability under Notification No.214/86-CE concerning electrical stampings used in the manufacture of PD pumps and fans. The case underscored the importance of factual verification to determine duty liability, emphasizing compliance with legal provisions for manufacturing processes. The remand highlighted the necessity for thorough examination to ensure accurate assessment of duty obligations, promoting fair adjudication and compliance with excise regulations.