2023 (2) TMI 369 - SCH - Central Excise

Job-work - revenue contended that the assesse was liable for the job work and after investigation issued a show-cause notice dated 29.9.2006 - HELD THAT - It is quite evident from the Rules of 2001 that Rule 7AA as framed on 30.4.2001 was superseded/repealed. The new regime brought into force under 2001 Rules described a procedure different from one envisioned under the Rules framed in 1944. Neither the showcause notice nor the order in original has adverted to this change and proceeded instead as if Rule 7AA was still in existence, which was a clear error. That error was noticed by CESTAT and correctly so. This Court is of the opinion that no question of law requiring determination arises in this appeal. The CESTAT order is justified. The Civil Appeal is accordingly dismissed.

Summary

Issues:
Challenge to CESTAT order allowing respondent's appeal regarding revenue liability for job work under Rule 7AA of Central Excise Rules, 1944 superseded by Central Excise Rules, 2001.

Analysis:
The Supreme Court addressed the revenue's challenge against the CESTAT order, which allowed the respondent's appeal concerning revenue liability for job work under Rule 7AA of the Central Excise Rules, 1944. The revenue contended that the respondent was liable for job work and issued a show-cause notice without citing the specific rule authorizing the tax collection for the work of job workers. However, the assessment order relied on Rule 7AA, which mandated payment of duty on goods produced on job work basis. The Commissioner upheld the demand based on Rule 7AA, specifying the duty payment obligation for goods manufactured on job work basis. The Court noted that the Rules of 2001 superseded the Rules of 1944, and the new regime introduced a different procedure. The CESTAT set aside the Commissioner's determination, highlighting the supersession of Rule 7AA by the Central Excise Rules of 2001, which the show-cause notice and original order failed to acknowledge, leading to a clear error. The Court affirmed the CESTAT's decision, dismissing the appeal as no legal question necessitating determination arose, concluding that the CESTAT order was justified based on the rule supersession and procedural error in the revenue's approach.

In conclusion, the Supreme Court upheld the CESTAT's decision, emphasizing the supersession of Rule 7AA by the Central Excise Rules of 2001, which altered the duty payment procedure for goods manufactured on job work basis. The Court found the revenue's failure to consider the rule change as a clear error, supporting the CESTAT's decision to set aside the Commissioner's determination. Consequently, the Court dismissed the appeal, stating no legal issue merited examination, and validated the CESTAT's order.