2004 (8) TMI 194 - AT - Central Excise

Summary

Issues:
- Whether invoices issued by the appellants to the job workers constitute stock transfer or sale as defined under Section 2(h) of the Central Excise Act, 1944.
- Whether the transfer of possession of goods to the job workers is supported by valuable consideration.

Analysis:
1. Issue 1 - Nature of Invoices:
The appellants, job workers manufacturing tyres for CEAT Ltd. and Apollo Tyres Ltd., issued invoices to the job workers under Rule 57GG of the Central Excise Rules, 1944. The department contended that these invoices were stock transfer invoices and did not amount to a sale as defined under Section 2(h) of the Act. The appellants argued that previous decisions, such as CCE v. A.P.S.E.B. and BPL Ltd. v. CCE, supported their claim that such invoices were eligible for Modvat credit. The Tribunal reviewed these decisions and concluded that transfer by book adjustments from the companies to the job workers should be considered a sale within the meaning of Section 2(h). Therefore, the goods transferred to the job workers on proper documents could not be denied to the appellants, and the appeal was allowed with consequential relief.

2. Issue 2 - Valuable Consideration for Transfer of Goods:
The Commissioner (Appeals) had earlier concluded that the transfer of possession of goods to the job workers could not be considered a sale under Section 2(h) of the Act due to the absence of payment or valuable consideration. However, the Tribunal noted that in similar situations in previous cases like Pratap Steel Rolling Mills Pvt. Ltd. v. CCE and CCE v. APSEB, the credit was allowed to the job worker. The Tribunal held that the transfer of goods to the job workers, supported by proper documents showing payment of duty and other details, should be considered a sale within the meaning of Section 2(h). Therefore, the transfer of possession of goods to the job workers was deemed to be supported by valuable consideration, and the appeal was allowed with consequential relief, if any.

In conclusion, the Tribunal ruled that the invoices issued by the appellants to the job workers constituted a sale within the meaning of Section 2(h) of the Central Excise Act, 1944. The transfer of possession of goods to the job workers, supported by proper documents and payment of duty, was considered to be in conformity with the Act. As a result, the appeal was allowed, and the appellants were granted relief in line with previous decisions and legal interpretations.