2018 (2) TMI 470 - AT - Central Excise

Demand of duty with penalty - It is claimed that the said moulds were returned to the appellant but the department is of the view that the same was never returned - Held that - the moulds were supplied by the appellant to its job-worker for testing. Even if the same were not returned, then the same will be of no use to the job-worker as it is only the appellant who will have to supply the articles to Mahindra and Mahindra Ltd., its principle - the moulds were sent only for the purpose of testing and not for sale - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Duty demand and penalty imposition on a job-worker for allegedly not returning moulds sent for testing.

Analysis:
The appeal was filed against an Order-in-Appeal that demanded duty and penalty from the appellant, a job-worker, for allegedly not returning moulds sent for testing. The appellant manufactured articles for its principal using these moulds. The department claimed that the moulds were never returned, leading to the duty demand and penalty imposition. The appellant contended that the moulds were indeed returned after testing and were not meant for sale. The Tribunal had previously remanded the matter to determine the nature of the moulds.

During the hearing, the appellant's counsel argued that the moulds were sent for testing and were eventually returned. The department's representative, however, supported the impugned order. Upon reviewing the facts and circumstances, the Tribunal concluded that even if the moulds were not returned, they would be of no use to the job-worker as only the appellant needed them to supply articles to its principal. The Tribunal found that the moulds were sent solely for testing purposes and not for sale.

In light of the above analysis, the Tribunal set aside the impugned order and allowed the appeal. The judgment emphasized that the purpose of sending the moulds was for testing and not for any commercial transaction.