2024 (12) TMI 1135 - HC - Central Excise

Whether the job worker is liable to pay central excise duty when the job worker has received raw material against challans under Rule 57 F (2) of the Central Excise Rules, 1944? - HELD THAT - The identical issue was taken up by the Supreme Court after the High Court passed an order in favour of the revenue in Kartar Rolling Mills v. Commissioner of Central Excise, New Delhi 2006 (3) TMI 63 - SUPREME COURT , and the Supreme Court held that ' Since the notification came into effect from 11-4-1994, the benefit of the notification cannot be extended to the appellants retrospectively w.e.f. 1-3-1994.' The demand for central excise duty ss affirmed by the Commissioner (Appeals) in the impugned order and subsequently upheld by the Tribunal, with a reduction in the penalties imposed upon the assessee - The reference is accordingly answered in favour of the revenue.

Issues:
1. Setting aside of earlier judgment by Supreme Court and remand to High Court for reconsideration.
2. Failure of High Court to consider previous Supreme Court decision.
3. Delay in listing and deciding cases by the registry.
4. Demand of excess duty and penalty reduction.
5. Question of law regarding liability of job worker to pay central excise duty.
6. Interpretation of Notification No. 214/86 and 83/94-CE.
7. Upholding of central excise duty demand and penalty reduction.

Analysis:

1. The Supreme Court set aside an earlier judgment in Civil Appeal No. 5326 of 2011, remanding the matter to the High Court for reconsideration. The High Court failed to consider a previous decision by the Supreme Court, leading to the setting aside of the judgment.

2. The Supreme Court directed the High Court to reconsider the matter expeditiously, emphasizing the need to take notice of the Supreme Court's previous decision in a connected matter. The High Court was instructed to consider the decision in Kartar Rolling Mills Vs. Commissioner of Central Excise, New Delhi.

3. The registry's delay in listing cases post the Supreme Court's order in 2011 was highlighted, noting that cases with specific time directives from the Supreme Court remained unresolved due to registry laxity. The High Court was directed to inform the Chief Justice about this situation.

4. The case involved a demand for excess duty upheld by the Tribunal, with a concurrent reduction in penalties. The issue revolved around the liability of a job worker to pay central excise duty when receiving raw materials. The Supreme Court's decision in Kartar Rolling Mills case was cited in support of the revenue's position.

5. The Supreme Court upheld the demand for central excise duty and the penalty reduction imposed by the Commissioner (Appeals) and the Tribunal. The decision was in favor of the revenue, based on the interpretation of relevant notifications and the facts of the case.

6. The judgment emphasized the importance of strict interpretation of exemption notifications and the need for evidence to support claims under such provisions. The Supreme Court's decision in the Kartar Rolling Mills case was crucial in determining the liability for central excise duty and penalties in the present case.

7. The High Court was directed to reconsider the matter in light of the Supreme Court's directives and the interpretation of relevant legal provisions. The reference was answered in favor of the revenue, affirming the demand for central excise duty and the reduction in penalties.

Conclusion:
The judgment highlighted the significance of considering previous legal decisions, the strict interpretation of exemption notifications, and the need for timely resolution of cases as directed by higher courts. The decision favored the revenue, upholding the demand for central excise duty and reducing penalties based on the specific legal interpretations provided by the Supreme Court.

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