2024 (12) TMI 8 - AT - Central Excise

Liability to pay Excise duty on the scrap/waste generated during the job work - whether the appellant who is the principal manufacturer and has sent these raw materials to the job workers for conversion in terms of Notification No. 214/86-CE dated 25.03.1986, is required to pay Central Excise duty in respect of waste and scrap generated at the job workers factories and cleared by the job workers without payment of duty for the disputed period? - HELD THAT - The Tribunal Chennai vide its Final Order No. 41199/2024 dated 10.09.2024 2024 (9) TMI 1245 - CESTAT CHENNAI has decided the issue in favour of the assessee. The Impugned Order dated 15.03.2016 of the Commissioner of Central Excise (Appeals-I), Chennai cannot sustain and so ordered to be set aside - Appeal allowed.

Summary

Issues:
Whether demand of Excise duty on the scrap/waste generated during the job work is legal and correct.

Analysis:
The judgment involves a case where M/s. Greaves Cotton Limited, engaged in manufacturing diesel engines, sent raw materials to job workers for processing. The issue revolved around whether the principal manufacturer is liable to pay Central Excise duty on the waste and scrap generated during job work and cleared by the job workers without payment of duty. The Assistant Commissioner of Central Excise issued a demand against the appellant, which was upheld by the Commissioner (Appeals). The appellant then appealed to the Appellate Tribunal CESTAT Chennai. The appellant argued that various Tribunal orders favored the assessee in similar cases. The authorized representative for the respondent affirmed the findings of the Commissioner of Central Excise (Appeals). The Tribunal, in its Final Order dated 10.09.2024, decided the issue in favor of the assessee, following earlier decisions in the appellant's own case and setting aside the demands raised. The Tribunal held that the waste and scrap generated at the job worker's end do not make the principal manufacturer liable to pay duty on such waste and scrap. It was noted that the issue had already been settled in previous orders for the appellant. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief, if any, as per law. The Impugned Order dated 15.03.2016 of the Commissioner of Central Excise (Appeals-I), Chennai was ordered to be set aside, and the appeal was allowed with consequential relief, if any, as per the law. The judgment was pronounced on 28.11.2024.