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TMI Blog2015 (8) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... o the condition that the said exemption shall apply only in cases where such goods are produced using raw materials or semi finished goods supplied by the client i.e., the principal manufacturer and goods so produced are returned back to the said client for use in or in relation to the manufacture of other goods on which appropriate duty of excise is payable. - Notification is condition precedent. Section 5A(1A) of the Central Excise Act provides for power to grant exemption from duty of excise. Section 5A(1A) of the Central Excise Act specifically provides that "for the removal of doubts, it is hereby declared that where an exemption under Sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985. It is the case of the Department that on information gathered from the Intelligence during the period between April 2007 to January 2008, FMTPR had availed inadmissible CENVAT credit of service tax paid on the activity of chrome plating done by their sister concern on job work basis under cover of material movement challans, without reversing the CENVAT credit availed thereon. FMGIL had returned the goods after completion of process of chrome plating to FMTPR under cover of an invoice on payment of service tax on the value of job work charges and further, the said goods received from FMTPR undergo various manufacturing processes and then gets cleared on payment of duty. 3. The activity of chrome plating was covered under the categ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al is correct in allowing the appeal filed by the assessee without appreciating the fact that M/s. Federal Mogul Goetze India Ltd., the job worker, has irregularly availed CENVAT Credit and wrongly paid Central Excise Duty/Service Tax, so as to enable their sister concern i.e., M/s. Federal Mogul TPR India Ltd., to avail inadmissible credit thereby giving undue benefit for the company as a whole? 2. Whether the CESTAT has erred in holding that the obligation or condition in the notification is applicable to the manufacturer of the final product and thereby it is a conditional notification. It is to be seen whether the obligation for availing benefit of exemption under a conditional notification is to be on the person availing the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to manufacture was exempted from payment of service tax, provided the job worked goods are further used in the manufacture of final products on which appropriate duty of excise is discharged by the principal manufacturer, the FMGIL though entitled for availment of such exemption notification, without availing the same, wrongly paid service tax under the activity of chrome plating with an intention to pass on the undue benefit of CENVAT Credit to FMTPR and also to avoid reversing the CENVAT credit availed by them on the input/input services. 6. It is the contention of the learned counsel that the Notification No. 8/2005 is an unconditional notification and the provisions of Section 5A(1A) of the Central Excise Act are applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 8 of 2005, dated 01-03-2005. The said notification reads as under: 'In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of production of goods on behalf of the client referred in sub-clause (v) of clause (19) of section 65 of the said Finance Act, from the whole of service tax leviable thereon under section 66 of the said Finance Act: Provided that the said exemption shall apply only in cases where such goods are produced using raw materials or semi-finished goods-supplied by the client and goods s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate duty of excise is payable. 10. Thus, this notification is condition precedent. The applicability of this notification shall be subject to the condition stipulated therein i.e., the principal manufacturer discharging the liability of appropriate duty of excise on these manufactured goods. Any job worker who undertakes services of processing is not free to avail the benefit of the said notification unless the recipient of the services pays appropriate duty of excise on the goods returned back by the job worker. This condition of payment of appropriate duty of excise by the recipient i.e., the principal manufacturer is sine qua non for availing the benefit of the notification by the job worker. Thus, the condition stipulated in the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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