9911796707
TMI Blog2005 (9) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... ys that where duty has been paid prior to issuance of show cause notice, no penalty is liable to be imposed on the assessee under Section 11AC of the CE Act, 1944. Accordingly, the Revenue's appeal is dismissed. 2. The Cross-objection filed by the assessee is against the demand of duty and imposition of Rule 173Q penalty. The Polambakkam unit of M/s. Brakes India Ltd. (assessee) is engaged in the manufacture of motor vehicle parts. They have another unit at Padi. The assessee used to get motor vehicle components manufactured by job workers. Necessary raw materials (iron steel castings, forgings and sheet metal) are supplied to the job worker and the latter processes the same into MV components, which are returned to the assessee. Iron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared the same on payment of duty. According to the assessee, as the Padi unit paid the duty on the scarp, the department could not raise demand of duty on them (assessee) in respect of the same scrap. The finding concurrently reached by the original authority and the first appellate authority in respect of the above scrap is that there is no evidence of any duty having been paid by the Padi unit in respect of the scrap generated at the job worker's premises out of the raw materials supplied by the assessee. The assessee's contention, in their cross-objection, is to the effect that the above finding has resulted from non-application of mind to the accounts of the two units. Learned Counsel has submitted that the return of scrap by the jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed to have been returned by M/s. Tajaswi Engineering Components Pvt. Ltd., both the authorities have rejected this claim. 4. With regard to the quantity of 31.611 MT of scrap found to have been generated at the premises of M/s. Pyrocraft Ltd., the assessee in their reply to show cause notice took the plea that the scrap realizable from the job work was much less than what was estimated in the show cause notice. On this dispute, there is no specific finding in the order of the original authority. The lower appellate authority has doubted the veracity of the assessee s contention having regard to the quality of metal sheets received by the job worker from the assessee. The assessee s grievance now is that the documentary evidence addu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to this Rule, scrap generated at the job worker s premises should either be cleared on payment of duty by the job worker himself or be returned within the prescribed time to the principal manufacturer. In the case of scrap generated at the premises of M/s. Balaji Engineering Works, as admitted by the assessee, scrap was received by their Padi unit from the job worker. It has been asserted by the assessee that Padi unit cleared this scrap on payment of duty. When the assessee asserts that duty on the scrap in question was paid by their sister unit, it is their burden to substantiate that fact. The lower appellate authority has held that there is no evidence to show that the duty was paid by the Padi unit. No evidence to show such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to file D-3 intimation in respect of any scrap returned by a job worker under Rule 57F. I am not able to agree with this proposition. Rule 57F envisages return of the job worked product along with the scrap by the job worker to the principal manufacturer, with the rider that the job worker, in respect of the scrap generated, has the option to dispose of the scrap himself on payment of duty. The law does not discriminate between job worked product and the scrap in so far as the requirement of D-3 intimation is concerned. Nevertheless, there seems to be no clear finding on the question whether the job worker had returned 37.014 MTs of scrap, after investigation, in relation to the period of dispute. I am of the view that the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther that a part of the same was lost in heating process. The subject matter of this case is scrap of iron steel. Iron steel even in powdery form are understood to be capable of being physically collected. That a part of the scrap was lost in heating or burning process has not been substantiated. Hence the plea of invisibility is inadmissible. 11. Coming to penalty, I find that a penalty of Rs. 5,000/- has been imposed on the assessee by the lower appellate authority under Rule 173Q. Non-observance to the procedure under Rule 57F is a fact, by now, established against the assessee. The penalty of Rs. 5,000/- is just and fair and the same is sustained. 12. The cross-objection stands disposed of in the above terms. It is made clea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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