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TMI Blog2017 (3) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as the products manufactured therefrom, are required to be in compliance with the conditions of notification no. 214/86-CE dated 25th March 1986 which, in paragraph 2, stipulates that the supplier availing of credit under rule 57A gives an undertaking to the jurisdictional Assistant/Deputy Commissioner of the factory of job-worker that goods will be used in or in relation to manufacture of final products and produces evidence of such usage besides discharging duty on the finished products. Having ascertained that the said conditions had not been fulfilled by the supplier, it was alleged that appellant was liable to duty on the goods, being distinct and excisable, produced using material supplied by the principal. Consequently, Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of action. 4. We have heard Learned Consultant for appellant and Learned Authorized Representative and have perused the records. We take note of the certificates issued by the suppliers of raw material and we find that the accompanying challans state clearly that the goods were supplied under rule 4(5)(a) of CENVAT Credit Rules of the appropriate year. Further, it was pointed out that the unit had been audited from 2001 onwards on a regular basis and a perusal of the correspondence exchanged between the audit wing and the appellant indicates that the job-work contracted by the appellant were under the scanner during the audits. 5. We find that the appellant is in receipt of raw materials supplied under cover of challans issued by their pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption or for export under bond, after intimation in writing to the jurisdictional Assistant Commissioner of Central Excise. Sub-rule (3) provides that the removal of the inputs for home consumption shall be made under cover of Rule 52A invoices and on payment of duty equal to the amount of credit taken on such inputs. Sub-rule (4), which is vital for the present case, is reproduced below:- "(4) The inputs can also be removed as such or after they have been partially processed by the manufacturer of the final products to a place outside his factory under the cover of a challan specified in this behalf by the Central Board of Excise and Customs, for the purposes of test, repair, refining, re-conditioning or carrying out any other operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Vice President in his dissenting order, it is explicit that, in so far as the processed fabrics returned by the appellants to the principal manufacturers under sub-rule (4) of Rule 57F are concerned, any liability for payment of duty on such goods arises only in the event of removal of such goods at the end of the principal manufacturers for home consumption vide clause (ii) of sub-rule (4) ibid. While clause (iii) of sub-rule (4) expressly provides for removal of the goods without payment of duty at the end of the principal manufacturers for export under bond, clause (i) of the sub-rule enables the principal manufacturers to use the said goods in the manufacture of their final products. There is no warrant, in my view, to presume that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... President in his dissenting order, holding that the appellants (job-workers who received inputs from principal manufacturers under challans issued under Rule 57F (4), as this rule stood during the relevant period, and returned the said goods after carrying out the process of heat-setting and stentering on job work basis to the principal manufacturers) were not required to pav duty on the goods so returned during the period in question. 7. We were also informed that this decision was carried by Revenue to the Hon'ble Supreme Court which dismissed the appeal after recording that the Attorney General conceded that circular no. 306/22/97-CX dated 20th March 1997 of Central Board of Excise & Customs covers the facts of these cases ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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