2014 (4) TMI 185 - AT - Central Excise

Waiver of predeposit of duty - SSI exemption notification - Held that - clause (b) of Notification No. 83/94 states that in the event of failure on the part of receiving back the goods from the job worker, the manufacturer would pay the duty as if such goods were manufactured by the said supplier and sold on his own account. In any event, if we take the job work goods of Rs. 31 lakhs then it would be within the exemption limit of Notification No. 8/2003-CE dated 1.4.2003. However, the Commissioner (Appeals) observed that they have surrendered the registration certificate and have no official communication with the Department regarding the movement of the semi-finished goods to the job worker. Hence, there is a factual dispute on the movement of the job worked goods - Conditional stay granted.

Summary

Issues: Waiver of predeposit of duty and penalty under Notification No. 83/94-CE for job work material; Compliance with SSI exemption notification for clearance value during the financial year 2003-04; Factual dispute on the movement of job worked goods.

Analysis:
1. The applicant sought a waiver of predeposit of duty amounting to Rs.4,96,996/- and an equal penalty along with interest. The applicant, a manufacturer of floor grills, supplied material to a job worker for galvanization under Notification No. 83/94-CE. The learned counsel argued that the clearance value during the financial year 2003-04 was Rs.48 lakhs, with job work material amounting to around Rs.31 lakhs, falling within the SSI exemption notification limit.

2. The Tribunal noted that as per clause (b) of Notification No. 83/94, failure to receive back goods from the job worker would require the manufacturer to pay duty as if the goods were manufactured and sold by the supplier. The job work goods of Rs. 31 lakhs were within the exemption limit of Notification No. 8/2003-CE. However, the Commissioner (Appeals) highlighted a lack of official communication with the Department regarding the movement of semi-finished goods to the job worker, leading to a factual dispute.

3. Due to the factual dispute on the movement of job worked goods, the Tribunal directed the applicant to deposit Rs.50,000/- within six weeks and report compliance by a specified date. Upon such deposit, the balance dues from the impugned order would be waived, and recovery stayed during the appeal process. This decision aimed to address the uncertainty surrounding the movement of goods and ensure compliance with the relevant notifications.

This detailed analysis of the judgment provides insights into the issues of waiver of predeposit, compliance with exemption notifications, and the resolution of factual disputes, as considered by the Appellate Tribunal CESTAT CHENNAI in the case.