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2024 (3) TMI 451 - AT - Central ExciseLevy of penalty under Rule 26 of Central Excise Rules, 2002 - failure to register with Central Excise - failure to maintain any record - failure to file returns - failure to make payment of central excise duty on inlay cards - HELD THAT - The explanation in N/N. 83/94-CE dated 11.04.1994 states that for the purpose of the said notification, the expression job work means processing of or working upon raw materials or semi-finished goods supplied to the job worker so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or for operation which is essential for the aforesaid process. M/s. Leo Pack was a job worker to whom raw materials were supplied by M/s. MEC Engineers for cutting the PVC rigid roll into smaller pieces and piercing the same to make it ready for display of jewellery and, therefore, we are satisfied that the activities carried out by M/s. Leo Pack was job work. The said Notification No. 83/94-CE which exempts the goods manufactured in a factory at job work from the whole of the duty of excise leviable thereon provided that the procedures set out in the said notification and in Notification No.84/94-CE are complied with. M/s. Leo Pack was job worker for M/s. MEC Engineers and M/s. Leo Pack was not required to pay central excise duty on the job work - the impugned order is not sustainable insofar as the same relates to confirmation of demand and imposition of penalty on M/s. Leo Pack. Appeal allowed.
Issues involved:
The issue involved in this case is whether M/s. Leo Pack, engaged in cutting, slitting, and punching of PVC rigid rolls supplied by M/s. MEC Engineers for making inlay cards, is liable to pay central excise duty on the processed material. Comprehensive details of the judgment: Issue 1: Liability to pay central excise duty The Revenue initiated investigations against M/s. Leo Pack based on documents and statements, alleging non-registration, non-maintenance of records, and non-payment of central excise duty on inlay cards. The show cause notice demanded central excise duty from M/s. Leo Pack and proposed a penalty on the partner. M/s. Leo Pack contended that they were merely doing job work for M/s. MEC Engineers, who paid central excise duty on the final product. They argued that they were not liable to pay excise duty as job workers. They also challenged the quantification method used for raising the demand. The original order was challenged, and the issue was remanded to consider the appeal. The subsequent order confirmed central excise duty against M/s. Leo Pack and imposed a penalty on the partner. The appellants challenged this order before the Tribunal. Issue 2: Interpretation of Notifications The appellant argued that Notification No. 83/94-CE and Notification No. 84/94-CE were applicable in their transaction with M/s. MEC Engineers. They claimed that as job workers, they were exempt from paying central excise duty. The appellant contended that the original authority did not consider this aspect and confirmed the demand incorrectly. They argued that the impugned order did not adhere to the Tribunal's directions. Court's Decision After considering the submissions and evidence, the Tribunal found that M/s. Leo Pack was a job worker for M/s. MEC Engineers, as evidenced by statements and invoices. The Tribunal referred to Notification No. 83/94-CE, which exempts goods manufactured at job work from excise duty if certain procedures are followed. Since central excise duty was paid by M/s. MEC Engineers when clearing the goods, M/s. Leo Pack was not liable to pay excise duty. Therefore, the impugned order was set aside, and both appeals were allowed. (Order pronounced in the open court on 07.03.2024) This summary provides a detailed overview of the legal judgment, addressing the issues involved and the Tribunal's decision on each issue.
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