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Issues Involved: Availability of benefit of Notification No. 119/75-C.E., dated April 30, 1975, to appellants concerning the manufacturing process on brass rods received from customers.
Issue 1: Interpretation of Notification No. 119/75-C.E. The appellants received brass rods from customers to manufacture forged nuts and valve bodies. They paid duty on job work charges per Notification No. 119/75, but the excise authorities later contended that the value of the raw material should also be included, leading to a short levy demand. The Assistant Collector rejected the appellants' plea, interpreting the Notification to apply only when an article is received and returned after job work, not when raw material is transformed into a new product. Issue 2: Appellate Collector's Confirmation The Appellate Collector upheld the Assistant Collector's order, despite the appellants' reliance on Trade Notice No. 99/75, which clarified that the article received and returned need not have the same nomenclature. Issue 3: Appellants' Argument The appellants argued that the scope of Notification No. 119/75 was clear: excise duty should only be on job work charges when raw material is received and returned after manufacturing. They cited Trade Notice No. 99/75 and various judgments, including the Gujarat High Court's decision in Anup Engineering Ltd., which supported their interpretation. Issue 4: Tribunal's Consideration The Tribunal considered the appellants' additional arguments and samples, noting that the manufacturing process involved hot forging and machining. The appellants cited several judgments, including those from the Gujarat, Calcutta, Madras, and Bombay High Courts, which supported their claim that the Notification applied even when the returned article differed from the received material. Issue 5: Departmental Representative's Argument The Departmental Representative relied on a Larger Bench judgment in National Organic and Chemicals Industries Limited (NOCIL) case, arguing that the physical character of the raw material was completely changed, making the resultant product distinct from the material received, thus disqualifying the appellants from the Notification's benefit. Issue 6: Tribunal's Decision The Tribunal, after considering various High Court judgments, concluded that the Notification No. 119/75 applied to the appellants. The Gujarat High Court in Anup Engineering Ltd. held that the Notification contemplated "manufacturing process," and the transformation of raw material did not disqualify the benefit. The Calcutta High Court in Madwa Coats Limited and other cases also supported this view. The Tribunal found that the essential identity of the brass rods was not lost, and the appellants were entitled to the Notification's benefit. Conclusion: The Tribunal allowed the appeal, granting the appellants the benefit of Notification No. 119/75, with consequential relief. The decision was based on the interpretation that the Notification applied to job work involving transformation of raw material, supported by various High Court judgments and the Tribunal's own precedents.
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