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2018 (8) TMI 608 - AT - Central ExciseJob-work - who is liable to pay duty - N/N. 83/1994-CE dated 11.04.1994 - Whether the assessee is eligible for exemption under Notification No.83/1994-CE for the goods manufactured by them on job work basis? - Held that - If the exemption notification is a conditional notification all conditions must be fulfilled and it is for the assessee to show that they have fulfilled the conditions. If the assessee fails to establish that they have fulfilled all the conditions of the notification they are not entitled to the benefit of the same. In this case the exemption notification requires the supplier of raw material to give an undertaking to the jurisdictional authorities of Central Excise having jurisdiction over the assessee that they will pay the relevant excise duty. Thus although the job worker is a manufacturer by virtue of the exemption notification r/w declaration made by the raw materials supplier the burden of discharging excise duty shifts on to the raw material supplier. The Revenue has a strong case as far as the allegation that the appellant has not fulfilled conditions stipulated in the N/N. 83/1994-CE is concerned - It a fit case to be remanded back to the original authority. Appeal allowed by way of remand.
Issues involved:
1. Eligibility for exemption under Notification No.83/1994-CE for goods manufactured on job work basis. 2. Verification of undertakings filed by suppliers of raw materials. 3. Allegations of wilful suppression of material facts by the assessee. 4. Burden of proof on the manufacturer availing exemption. 5. Interpretation of conditional exemption notification. Detailed Analysis: Issue 1: Eligibility for exemption under Notification No.83/1994-CE The appellant, a manufacturer of pet pre-forms, jars, and bottles, availed SSI exemption under Notification No.9/2003 and cleared goods under Notification No.83/1994-CE. The dispute arose when it was found that necessary undertakings from suppliers of raw materials were not filed as required by the notification. The Commissioner confirmed the demand, stating that the burden of proof lies with the manufacturer to fulfill all conditions of the exemption notification. Issue 2: Verification of undertakings filed by suppliers The show cause notice alleged that undertakings filed by suppliers were not genuine, lacked essential details, and were not filed with the appropriate jurisdictional officers. The Commissioner conducted formal inquiries and found discrepancies, leading to the conclusion that the suppliers did not exist and declarations were fabricated. The appellant argued that provisional registration certificates from the department of Industries supported the genuineness of the suppliers. Issue 3: Allegations of wilful suppression The Commissioner asserted that the appellant wilfully suppressed job worker clearances and fabricated declarations to avail exemption. The appellant countered, stating that undertakings were given by suppliers, and the benefit of exemption should not be denied based on missing details in the undertakings. Issue 4: Burden of proof on the manufacturer The Commissioner emphasized that the burden of proof lies with the manufacturer to ensure conditions of the notification are met. The appellant's argument focused on the responsibility of suppliers to provide undertakings and the procedural aspects of material movement. Issue 5: Interpretation of conditional exemption notification Citing a Supreme Court decision, the Tribunal highlighted that exemption notifications should be interpreted strictly, with the burden on the assessee to prove eligibility. Ambiguity in notifications should not benefit the assessee, and all conditions must be fulfilled. The Tribunal remanded the case back to the original authority to adjudicate solely based on grounds mentioned in the show cause notice and available documents, emphasizing strict interpretation of the exemption notification. Overall, the Tribunal allowed the appeal by way of remand, directing a reevaluation of the case based on the original grounds cited in the show cause notice, ensuring compliance with the conditions of the exemption notification.
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