2008 (1) TMI 153 - AT - Central Excise

Duty-liability on intermediate goods manufactured by job workers - low priced footwear manufactured by principal manufacturer by using intermediate goods manufactured by the job workers not. 214/86 not applicable because footwear manufactured by principal manufacturer are fully exempt - since the Not. 214/86 is not applicable; the appellants are not responsible for paying any duty on the impugned materials processed by the job workers, even if the same were to be held as excisable

Summary

Issues:
1. Interpretation of Notification No. 214/86-C.E.
2. Liability of duty on intermediate goods processed by job workers.
3. Applicability of previous decisions on similar issues.

Interpretation of Notification No. 214/86-C.E.:
The appellants sent raw materials to job workers without taking MODVAT Credit, receiving processed goods back for manufacturing low priced footwear exempt from duty. The dispute pertained to goods used for exempt footwear manufacture. The exemption under Notification No. 214/86-C.E. required goods used in relation to final products attracting excise duty. The appellants claimed they were not eligible for this exemption due to the nature of the final products. Citing a previous decision, they argued that any duty liability should fall on the job workers, not them.

Liability of duty on intermediate goods processed by job workers:
The department contended that the duty liability for intermediate goods processed by job workers rested with the appellants. They referred to a pending appeal at the Supreme Court but acknowledged no stay was granted against the Tribunal's Order. After considering arguments and precedents, the Tribunal noted the distinction between the current case and the cited precedent involving Rule 57F of the Central Excise Rules, where duty credit was claimed before processing. Following a previous decision, the Tribunal ruled that since Notification No. 214/86-C.E. did not apply, the appellants were not liable to pay duty on the processed materials by job workers, even if deemed excisable.

Applicability of previous decisions on similar issues:
The Tribunal relied on a previous decision involving a similar issue to conclude that the appellants were not responsible for duty payment on processed materials by job workers. By following the precedent, the Tribunal set aside the impugned Orders and allowed the appeals, without delving into other raised issues like limitation. The decision was made based on the established ratio of the earlier Order, emphasizing consistency in interpretation and application of relevant laws.

This judgment clarifies the application of Notification No. 214/86-C.E., outlines duty liabilities concerning goods processed by job workers, and highlights the significance of previous decisions in guiding similar cases for uniformity and legal certainty.