2000 (11) TMI 232 - AT - Central Excise

Summary

Issues involved: Whether exemption under Notification No. 214/86-C.E. dated 25-3-86 is available for goods manufactured by M/s. International Engineering & Mfg. Services Pvt. Ltd. as job workers.

Details of the Judgment:

1. The appellant claimed exemption under Notification No. 214/86-C.E. for goods manufactured as job workers. The Adjudicating Authority confirmed duty and imposed penalty under Section 11AC, which was upheld by the Commissioner (Appeal). The appellant argued that since they were job workers receiving inputs under Rule 57F(4), no excise duty should be charged. They also mentioned the requirement of an undertaking by the principal manufacturer for the exemption. The appellant relied on legal precedents supporting the claim for notification benefits at any stage.

2. The Central Excise Department seized finished goods from the appellant's premises, which were confiscated with an option to redeem on payment of a fine. The appellant contended that no confiscation was warranted, citing a Tribunal case. They also argued against the penalty imposed under Section 11AC, referring to a Tribunal decision. The appellant highlighted the denial of small-scale exemption for a specific period due to non-filing of a declaration under Notification No. 16/97-C.E.

3. The Tribunal considered both sides' submissions and found that the appellant, as job workers, manufactured excisable goods, making them liable for duty. The Tribunal rejected the argument that the raw material supplier should be considered the manufacturer, citing legal precedents. The Tribunal emphasized that the benefit of Notification No. 214/86-C.E. is subject to specific conditions, which the appellant failed to fulfill, thus denying them the exemption.

4. The Tribunal upheld the demand for Central Excise Duty as per the impugned order. Regarding the penalty under Section 11AC, the Tribunal agreed with the appellant's reference to a previous case and set aside the penalty, remanding the matter for fresh consideration. The seized goods, not accounted for in statutory records, were subject to confiscation. The Tribunal upheld the confiscation but reduced the redemption fine from Rs. 50,000 to Rs. 25,000 for the appellant's seized goods.

5. In conclusion, the Tribunal disposed of the appeal by upholding the duty demand, setting aside the penalty, and reducing the redemption fine for the seized goods.