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TMI Blog1996 (2) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... dary manufacturer for the purposes of the above Rule 56C. Originally, the unlinned Hemispheres were made by M/s. PJ from MS plates supplied by M/s. Tata. On such manufacture of unlinned hemispheres M/s. P.J. paid central excise duty under Item No. 25(8) of the erstwhile schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Tariff ). After such payment of duty, the goods remained with M/s. PJ although they had been manufactured on job work basis for M/s. Tata out of the MS plates supplied by M/s. Tata. For lining of stainless steel plates on the above unlinned hemispheres M/s. Tata supplied SS plates to M/s. PJ after obtaining permission to work under the provisions of Rule 56C of the Rules. The plates were procured from the market at Bombay and were directly supplied from Bombay to M/s. PJ, the job worker at Ahmedabad. 3. The goods received back in finished condition from the secondary manufacturer were used as covers of the evaporator bodies in the make-up water (MUW) plant after drilling, welding, lagging and fixing the safety valves, gauges, etc. They were not used as raw materials or components to the excisable goods. They were also not produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent view has already been taken in the matter by adjudicating authority. The ld. SDR relied upon the Hon ble Supreme Court s decision in the case of Prestige Engg, (I) Ltd v. Collector of Central Excise, Meerut - 1994 (73) E.L.T. 497 (SC). 7. We have carefully considered the matter. The goods involved in these proceedings are MS dished ends (Hemispherical Body - hereinafter called `Hemispheres ), which were, during the relevant time, classifiable under Item No. 68 of the Tariff. They had been manufactured by M/s. PJ, who for the purposes of such manufacture, worked as secondary manufacturer - job worker under Rule 56C and manufactured the goods falling under Item No. 68 for their primary manufacturer - M/s. Tata. They were meant to be fitted in the MUW plant. Before lining with SS plates and conversion into a product classifiable under Item No. 68, they had been manufactured by PJ, the secondary manufacturer out of the MS plates supplied by M/s. Tata, on job work basis. On such manufacture out of MS plates supplied by M/s. Tata, M/s. PJ paid central excise duty under Item No. 25(8) (Iron Steel and products thereof), during August/September, 1984, on these products before lini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of excisable goods but were the component part for MUW plant. The provisions make it very clear that only the raw materials or component parts for the manufacture of exisable goods alone could be removed without payment of duty and not the part of the machine or part to be used in a machine, unless such a machine in itself are the excisable goods manufactured by the primary manufacturer. 9 The goods under consideration were not for use within the factory as raw materials or component parts for the manufacture of excisable goods. They were used as covers of evaporators bodies in the MUW plant. Thus, the conditions of [sub-rule] (2) of Rule 56C had not been satisfied [sub-rule] 2 of Rule 56C reads as under :- (2) The finished goods brought by a primary manufacturer under sub-rule (1) may be removed :- (a) On payment of duty at the appropriate rate; or (c) without payment of duty, (except for such goods which are in the nature of complete machinery meant for producing or processing any goods), for use within his factory as raw materials or component parts for the manufacture of excisable goods; or (d) without payment of duty to the secondary manufacturer for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 of 75 are not applicable in this case. 11. The appellants have taken a plea that the show cause notice in this case had been issued beyond the normal period of limitation and as there was no suppression, the demand was hit by time bar. The correspondence between the Revenue and the appellants sheds clear light on the dutiability and the duty liability of the goods in question. Rule 56C provides that where the duty becomes chargeable under provisions of the said Rule 56C on any goods or finished goods the rate of duty and the Tariff valuation if any, applicable to such goods and the finished goods shall be the rate and Tariff valuation in force. (a) In the case of actual removal of the finished goods from the factory of the primary manufacturer or the removal of any other goods falling under the said T.I. No. 68 from the factory of the secondary manufacturer in terms of the IVth Proviso to sub-rule (1) of the Rule 56C, it will be the date of such removal. .............................................................................................. (c) In any other case, it is the date of which the duty is paid, which is relevant. In this case when the goods classifiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules, 1944. Moreover, the assessee is working under the provisions of Chapter VIIA of the Central Excise Rules, 1944. It is also on record that the Department conducted inquiry after verification of D-3s filed on 17-8-1984 and 6-9-1984. It is also on record that the primary manufacturer for the first time informed on 23-4-1985 that they had supplied SS plates for lining on Hemispheres (also known as MS Dished Ends) which were made by M/s. P.J. Surotia Co., Ahmedabad from MS Plates supplied by them earlier as per their order. The above facts were not made known to the proper officer and as such it is established that the facts were suppressed at the time of application dated 9-2-1984. We agree with these findings. 12. On giving our careful consideration to the facts and circumstances of the case, we do not find any infirmity in the order passed by the Collector of Central Excise, Rajkot. He has already taken a lenient view while imposing a penalty of Rs. 10,000/-. In the circumstances of the case, we find no ground for interfering with the impugned order both with regard to the payment of duty of Rs. 70,319.16 and imposition of penalty of Rs. 10,000/-. 13. Taki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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