2006 (6) TMI 24 - AT - Central Excise

Central Excise Required permission to clear the goods from job workers premises not obtained due to procedural lapse, no further duty payable by job worker on clearance of multi piece package

Summary

Issues:
- Clearance of goods from job worker's premises without permission
- Validity of permission granted by the Commissioner
- Compliance with Cenvat Credit Rules and Notification No. 214/86
- Valuation of goods based on MRP
- Jurisdiction of the Commissioner in granting/refusing permission

Analysis:

1. Clearance of goods from job worker's premises without permission:
The case involved the Respondents sending soaps to a job worker without obtaining permission from the Commissioner as required under Rule 4 (6) of Cenvat Rules, 2001. The Revenue contended that duty should be discharged based on the MRP printed on each soap pack, not the multi-piece package. However, both lower authorities found that permission was obtained under the old Rules, albeit without specifying a period. The Respondents had also applied for permission for subsequent periods. The Tribunal agreed that the absence of specific permission for the relevant financial years was a procedural lapse, not warranting higher duty based on individual soap pack MRPs.

2. Validity of permission granted by the Commissioner:
The Revenue argued that the permission granted in a previous year did not automatically extend to subsequent years under Cenvat Credit Rules, 2001. They contended that each removal required specific permission, and the Respondents should have applied for permission for the financial years in question. The Tribunal acknowledged the procedural requirement but emphasized that the duty demand based on lack of specific permission was unwarranted, especially considering compliance with Notification No. 214/86 and subsequent application for permission.

3. Compliance with Cenvat Credit Rules and Notification No. 214/86:
The issue of compliance with Cenvat Credit Rules, 2001 and Notification No. 214/86 arose in the context of permission for clearances from the job worker's premises. The lower authorities found that the Respondents had followed the prescribed procedure under Notification No. 214/86 while removing goods. The Tribunal concurred with this finding and emphasized that the duty already paid by the Respondents for clearances was in order, as per relevant Circulars.

4. Valuation of goods based on MRP:
The valuation of goods for duty calculation purposes was a key contention, with the Revenue advocating for duty based on individual soap pack MRPs due to lack of specific permission for clearances. However, the Tribunal upheld the lower authorities' decision to consider the MRP printed on the multi-piece package, given the procedural lapse in obtaining permission did not warrant differential duty based on individual soap pack MRPs.

5. Jurisdiction of the Commissioner in granting/refusing permission:
The Commissioner's role in granting or refusing permission for clearances was scrutinized, with the Revenue challenging the Commissioner's findings and remarks on the Respondent's application for permission. The Tribunal noted the procedural lapse in obtaining permission but emphasized that demanding higher duty solely based on this lapse was unwarranted, especially in light of the Board's Circular and compliance with relevant procedures.

In conclusion, the Tribunal rejected the Revenue's appeal, emphasizing that the procedural lapses did not justify differential duty demands, and the duty already paid by the Respondents for clearances was deemed appropriate based on the circumstances and compliance with relevant rules and notifications.