2017 (9) TMI 1060 - AT - Central Excise

N/N. 214/86 CE dated 25 March 1986 - job-work - whether the appellant have violated the provisions of job work and/or the scheme of job work as notified under N/N. 214/86 CE dated 25 March 1986? - Held that - there is no allegation in the show cause notice of the violation of any of the conditions of the N/N. 214/86 CE - proper declarations have been filed by the principal manufacturer which have been accepted by the Department particularly by the Assistant Commissioner of Central Excise having jurisdiction over the factory of the appellant - the learned Commissioner have observed that there is only a venial or technical breach and the whole situation is Revenue neutral. There being no malafide intention on the part of the appellants to evade payment of duty the SCN is misconceived and not maintainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Violation of provisions of job work and/or the scheme of job work under Notification No. 214/86 CE dated 25 March, 1986.

Analysis:
The issue in these appeals revolves around whether the appellant violated the provisions of job work and the scheme of job work under Notification No. 214/86 CE. The appellant, engaged in the production of Attars, was alleged to have wrongly availed exemption benefits and cleared goods without payment of duty. The process of manufacturing Attars involved the processing of various herbs through distillation. The Revenue contended that the appellant was not undertaking job work but selling the product, leading to a proposed duty levy for a specific period. The show cause notice was adjudicated, confirming the demand and imposing penalties on the firm and the partner under relevant rules.

The appellant challenged the decision before the Tribunal. The scheme of job work under the Notification was examined, highlighting that the job worker should not be liable to pay excise duty if certain conditions were met. The appellant's principal had filed necessary undertakings and declarations, indicating compliance with the Notification's requirements. The Tribunal noted that there was no allegation of violating the Notification's conditions in the show cause notice. Declarations filed by the principal manufacturer were accepted by the Department, and the Commissioner observed that any breach was minor and revenue-neutral, with no intention to evade duty.

After hearing the parties and considering the contentions, the Tribunal found that the show cause notice was misconceived and not maintainable. It was concluded that there was no violation of the Notification's conditions and that the situation was revenue-neutral, with no malafide intention to evade duty. As a result, the appeals were allowed, and the impugned orders were set aside, with the appellant entitled to any consequential benefits in accordance with the law.