9911796707
TMI Blog2013 (9) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the appellant to make a pre-deposit of Rs. 11.52 lakhs and report compliance on 11-7-2011. Against these orders, the appellants filed appeals before the Hon'ble High Court of Bombay vide Central Excise Appeals Nos. 31/2011 and 52/2011 and the Hon'ble High Court vide order dated 26-7-2011 [2012 (275) E.L.T. 34 (Bom.)] remitted the matters back to the Tribunal for reconsidering the applications for waiver of pre-deposit. The Hon'ble High Court in Central Excise Appeal No. 52/2011 directed us as follows : "10. On the question of merits, we are of the view that it would be appropriate in the interests of justice to remand the proceedings back to the Tribunal for reconsideration. This is in view of the fact that prima facie it would appear that the Bangalore Bench of the Tribunal has taken a view which would have a material bearing on the issue involved, in P.R. Rolling Mills Pvt. Ltd. (supra). The Tribunal ought to have considered the impact of the judgment of the Supreme Court in International Auto Ltd. (supra) which was cited before it. In this view of the matter and without expressing any opinion on the merits of the question as to whether a prima facie case has been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) ibid. The learned counsel also relies on the judgment of the Hon'ble High Court of Bombay dated 22-6-2011 in Central Excise Appeal No. 44/2011 in the case of Automotive Stampings and Assemblies Limited v. Commissioner of Central Excise, Pune-I wherein while considering the stay applications decided by this Tribunal, the Hon'ble High Court set aside the order of this Tribunal directing the appellant to make pre-deposit of Rs. 30,57,319/- and directed the Tribunal to hear the matter without insisting on pre-deposit. In the light of these decisions, the learned counsel for the appellants submits that in the instant cases, there should be complete waiver of pre-deposit of the dues adjudged. Lastly, the learned counsel argues that no suppression can be alleged in the instant cases on the part of the appellants inasmuch as there were contradictory views about the inclusion/exclusion of the cost of the scrap in the value of the intermediate products manufactured and supplied on job-work basis and, therefore, extended period of limitation could not be invoked to confirm the duty demands. He further submits that inasmuch as the final product producer is entitled for taking CENVAT credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking job-work on such material and returning the processed material without payment of duty. While doing the job-work, the job-worker also added certain inputs on which he had taken MODVAT credit. The question before the Hon'ble Apex Court was whether the value of the material supplied by the principal-manufacturer on which no MODVAT credit was taken by the appellant could be included in the value of the intermediate product for the purpose of payment of duty. The Hon'ble Apex Court held that since the job-worker was operating under Rule 57F(2)(b) procedure of the Central Excise Rules, as it stood at the relevant time, which provided for supply of goods without payment of duty on the job-worked product, the question of inclusion of the value of inputs received from the principal-manufacturer does not arise inasmuch as the job worker had not taken credit of the duties paid on such inputs received from the principal-manufacturer. Similarly, in the case of P.R. Rolling Mills Pvt. Ltd.'s case, decided by the Bangalore Bench of the Tribunal, there also the appellant-job worker was undertaking the job-work as per the provisions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conversion charges and by doing so there is no inclusion of same charge twice over, as erroneously held by the Tribunal. In the instant case, the job-worker is retaining the scrap and selling the scrap and retaining the sale proceeds of such scrap with himself. It is unimaginable that a job-worker would not have taken into account the value of the scrap that he can retain while quoting his job-charges. Similarly, the principal-manufacturer while negotiating the job-work charges obviously would have taken into account the cost of scrap that the job-worker is entitled to retain and sell. Normal business prudence would compel both the principal-manufacturer and the job-worker to take into account the value of the scrap that will be retained by the job-worker which can be sold by him. Therefore, such retention of scrap by the job-worker has an inherent depressing effect on the conversion charges negotiated between the principal-manufacturer and job-worker and therefore, following the ratio of the judgment of the Hon'ble Apex Court in the cases cited supra, such scrap value is liable to be added in the value of the job-worked product which has been returned to the principal-manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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