2018 (12) TMI 662 - AT - Central Excise

Goods cleared after conversion without cover of any invoice - Rule 57F(2)/57F(3) of CER - Held that - M/s. Ratna Fibres are found to be not registered and have not maintained any records. M/s. Bangalore Monofilament has stated that they have not included such clearances in their turn over and M/s. Elastic Enterprises have, however, accepted that they have included. Moreover, it is seen that the Central Excise Acts and Rules existing at that point of time had a clear provision in movement of goods under job work. The appellants have not used the challan as prescribed under Rule 57F(2)/57F(3) or any other document prescribed by the Department. It clearly specifies the category of manufacturers who are availing the CENVAT credit and who are not availing CENVAT credit to prevent any misuse of the provision of exemption a clear cut procedure has been provided in the rules for Monofilament of goods on job work basis. The job work procedure cannot claim at any after thought the procedure and forms prescribed therein are fundamental to the working of the procedure. Non-adherence to the same will dis-entitle the appellants to the exemption they have claimed. Appeal dismissed - decided against appellant.

Summary

Issues: Alleged non-payment of Central Excise duty on manufactured goods under job work basis.

Analysis:
The case involved M/s. Interlink Plastics & Fibres Pvt. Ltd., accused of manufacturing and clearing HDPE Monofilament yarn under job work without paying Central Excise duty. The Department claimed that the appellants suppressed facts and cleared goods without proper documentation. The matter was remanded back to the Adjudicating Authority for reconsideration. The Additional Commissioner confirmed a duty of ?2,76,654 and imposed a penalty of ?25,000. The Commissioner (A) upheld the original order, leading to this appeal.

The learned AR argued that the appellants' claim of being within the exemption limit under Notification No. 1/93 was unacceptable due to different provisions for manufacturers availing CENVAT credit. The appellants did not dispute the duty liability on goods cleared for job work, making them liable to pay duty and penalty under Section 173(Q).

In the absence of representation from the appellants, the Tribunal reviewed the case. It was found that while the appellants contended they cleared goods without duty payment based on assurances from customers, the records did not confirm this. One customer was unregistered and lacked proper records, while another denied including the clearances in their turnover. The Tribunal noted the importance of following prescribed procedures under the Central Excise Acts and Rules, emphasizing the necessity of using specified documents for goods movement under job work. Failure to adhere to these procedures disqualified the appellants from claiming exemptions.

Ultimately, the Tribunal dismissed the appeal, ruling that the appellants' failure to comply with legal provisions rendered them ineligible for the claimed exemptions. The judgment was pronounced on 10/12/2018.