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TMI Blog2007 (3) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... ply of dipping chemicals indicate the arrangement between Goodyear and SRF which ensured the supply to Goodyear of NDTCF manufactured with the free supplies. Movement of goods under Rule 57F(4)(i) (ii) on payment of duty had served only this purpose in the case discussed in Jay Yuhshin Ltd. v. C.C.E.[ 2000 (11) TMI 250 - CEGAT, COURT NO. I, NEW DELHI] . They had started including value of free supplies from Goodyear from 1-4-1999. In the light of the ratio in the Apex Court s in the International Auto Ltd.[ 2005 (3) TMI 132 - SUPREME COURT] by the ld. Counsel for the (appellants, we find that in the facts of this case, the demand of duty, interest and penalty in the impugned order are not sustainable. We vacate the orders to that effect. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants as Rs. 77,37,560/- and imposed equal amount of penalty under Section 11AC. He also demanded interest on the above duty amount. This appeal is against the above Order No. 67/05, dated 27-12-2005. 2. The impugned order has been passed following the remand order of the CESTAT vide Final Order No. 300/05 - NB(A), dated 15-2-2005 directing the Commissioner to examine the exigibility and classification of the impugned goods in the light of the decision of the Apex Court in the case of MRF Ltd. reported in 2005 (180) E.L.T. 145 (S.C.) and to pass a fresh decision on the other points relating to extended period and quantification of demand. 3. In the appeal before us the appellants have contested the exigibility of the goods, dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above decision squarely applied to their case, and the impugned order was incorrect. He also submitted that the decision of the Tribunal in Jay Yuhshin Ltd. v. C.C.E., 2001 (137) E.L.T. 1098 (Tri.-Del.) had considered a similar situation where the manufacturer of intermediate products (M/s. Jay Yuhshin Ltd.) operating under Rule 57F(4)(i) (ii) [equivalent to Rule 57F(2)(b) discussed in the International Auto Ltd. case supra] had not included cost of components received free of cost from the manufacturer of final products, M/s. Maruti Udyog Ltd. (MUL) in the value of the intermediate product manufactured and cleared to MUL. It was argued before the Tribunal that the full duty had not been paid owing to their bona fide belief about the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmediate product and the manufacturer of final product operated under Modvat Scheme, availment of credit on inputs by the manufacturer of intermediate products who received free supply of inputs/components parts was immaterial and that the manufacturer of the final product was eligible to utilize the credit of duty paid on inputs received as well as the intermediate product received under Rule 57F(2)(b) [replaced by Rule 57F(4)] for clearance of final product used. In the circumstances, we find that the impugned order is inconsistent with the ratio of above decision of the Apex Court (supra). 8. In the International Auto case, Telco had supplied components free of cost to International Auto Ltd. for manufacture and supply of floor plate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 718 (Tri-Del.), MUL had supplied certain components free of cost under Rule 57F(4)(i) (ii) to M/s. Jay Yuhshin Ltd. to manufacture intermediate products needed in the manufacture of cars. Jay Yuhshin did not include the value of free supplies for valuation of the intermediate products supplied to MUL. Jay Yuhshin had also taken credit of duty paid on the free supplies. The Tribunal decided that Jay Yuhshin should pay duty on the value of intermediate goods including the value of free supplies and upheld the demand and penalty. Following the above decision Delhi Bench of this Tribunal had passed the order in Jay Yuhshin Ltd. v. C.C.E., New Delhi reported as 2001 (137) E.L.T. 1098 (Tri-Del) affirming the demand and penalty (though reduced t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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