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TMI Blog2012 (5) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... t finished product is cleared on payment of duty. In this case, the crankshafts were used by Escorts in the manufacture of engines for tractors and the engines, in turn, were used in the manufacture of tractors. Though the tractors during the period of dispute were fully exempt from duty and for this reason, exemption under Notification No. 67/95-C.E. was no longer available to the engines, duty should have been paid on the engines by M/s. Escorts. But prima facie, there is no evidence that M/s. Escorts have [not] discharged duty on the engines. In view of this, exemption Notification No. 214/86-C.E. would no longer be available to the appellant in respect of crankshafts manufactured by them - Conditional stay granted. - E/1612/2011 - 883/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be used in the tractors. The Appellant had filed a declaration as required under exemption Notification No. 214/86-C.E. for availing duty exemption in respect of the goods manufactured on job work basis out of rough castings received from M/s. Escorts, under job-work challans. The exemption was available subject to the condition that the principal manufacturer discharges the duty on the finished goods. In this case, during the period of dispute, the tractors were fully exempt from duty and, hence, the engines for the tractors manufactured by them were not eligible for captive consumption exemption under Notification No. 67/95-C.E. and were liable to duty. However, M/s. Escorts were not paying any duty on the engines. A show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 214/86-C.E., and, therefore, they were not liable to pay any duty, that it was M/s. Escorts Ltd. who were to pay the duty on the crankshafts or on the finished products cleared by them in which crankshafts were used and for failure of M/s. Escorts to discharge the duty liability, the duty cannot be demanded from the appellant, that the entire clearances to M/s. Escorts had been declared by the appellant in their ER-I Returns and as such, there was no intention on the part of the appellant to evade the duty and hence, the extended period under proviso to Section 11A(1) cannot be invoked, that for the same reason, penalty equal to the amount of duty demand cannot be imposed under Section 11AC, that the bulk of the duty demand against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and hence, this is not the case from the requirement of pre-deposit. 5. We have carefully considered the submissions from both the sides and perused the records. 6. The undisputed facts are that the appellant manufactured crankshafts out of the rough castings received from M/s. Escorts on job work basis and, they were sending back the fully finished crankshafts to M/s. Escorts without payment of duty under Notification No. 214/86-C.E. The duty liability on the goods manufactured by the job worker and sent back to the principal manufacturer is required to be discharged by the principal manufacturer or in case goods are used by the principal manufacturer in the manufacturing of some other finished products, that finished product is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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