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TMI Blog2011 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ligation to pay the duty on waste and scrap used at the job worker s end and sold by him - E/557/2010 - A/46/2011-WZB/AHD - Dated:- 6-1-2011 - Mrs. Archana Wadhwa, Mr. B.S.V. Murthy, JJ. Shri S.R. Dixit, Adv. for the Assessee; Shri Inamuddin Ahmed, SDR for the Revenue. Per: Mrs. Archana Wadhwa: Duty of Rs.1,24,01,318/- stand confirmed against the appellant for the period 01.11.03 to 31.12.07, on the ground that the waste and scrap arising at job worker end and sold by him to independent buyers is liable to duty of Excise in the principal manufacturer s hands. 2. As per facts on record, the appellant is engaged in manufacture of various types of balls and roller bearings falling under Chapter 84 of First Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order, confirmed the demand, as proposed, along with interest and imposed penalty of equal amount. Hence the present appeal. 4. We have heard both the sides duly represented by Shri S.R. Dixit, learned Advocate appearing for the appellant and Shri Inamuddin Ahmed, learned SDR appearing for the Revenue. 5. The Commissioner, while confirming the demand of duty, has relied upon the provisions of Rule 4 and Rule 4(5)(a) of CENVAT Credit Rules, 2002/2004. By relying upon the provisions of Rule 4(5)(a), he concluded that waste and scrap generated at the job worker s end was required to be returned to the appellant s factory, who were duty bound to clear the same on payment of duty. For better appreciation, we reproduce Rule 4(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to be reversed. As such, in terms of above Rule, no duty liability can be fastened upon the principal manufacturer, in case of non-receipt of goods, but the consequence would be reversal of the credit availed on the inputs. The learned adjudicating authority has pressed the said Rule into service, which on the face of it, can be said to be not applicable. 7. appellants have strongly contended that they are not the manufacturer of waste and scrap and in terms of provisions of Section 3 of Central Excise Act, 1944, duty can be demanded from the manufacturer i.e. one who has actually manufactured the excisable goods. Inasmuch as, waste and scrap has arisen in the hands of the job worker, who was the manufacturer, duty liability, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Rocket Engg. Corpn. Ltd. stand confirmed by Hon'ble High Court of Mumbai as reported in 2008 (223) ELT 347 (Tri-Mum.), when the appeal filed by CCE was rejected. The said decision being a short judgment, is reproduced below for sake of reference. Heard rival parties. 2.Learned Counsel appearing for the appellant contends that following substantial question of law arises for consideration of this Court. - A Whether the assessee i.e. the supplier of inputs to the job worker is liable to pay Central Excise Duty on the scrap generated at the job worker end, which is not received back from the job worker within the specified time in terms of Notification No. 214/86-C.E., dated 25-3-1986 as amended r/w Rule 4(5)(a) of Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on the said judgment of Hon'ble Supreme Court was neither warranted or justified. 11. The issue having been decided in the case of M/s Rocket Engineering Corpn. Ltd. as also in the case of M/s Emco Ltd. Vs. CCE Mumbai 2008 (223) ELT 613 (Tri-Mum.), laying down that waste and scrap used at the end of job worker cannot be held to be dutiable in the principal manufacturer s hands, we are of the view that the duty confirmed against the appellant is not justified. Further, the Tribunal s decision stand upheld by Hon'ble High Court of Mumbai as detailed supra. There is no contra decision shown to us. 12. In view of the above discussion, we set aside confirmation of differential demand of duty, interest and imposition of penalty upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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