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TMI Blog2018 (5) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of Central Excise duty on the moulds manufactured by them and removed to the job-worker under said provisions of Rule 4 (5) (b) and further they are eligible to take Cenvat Credit of the same duty paid. The situation is Revenue neutral. In view of the majority decision, the appeal is allowed. - E/2689/2008-EX - Final Order No. 62005/2018 - Dated:- 26-3-2018 - Mr. Ashok Jindal, Member (Judicial) and Mr. Devender Singh, Member (Technical) Present for the Appellant: Ms. Krati Somani, Advocate Present for the Respondent: Shri Satyapal, AR ORDER Per: Ashok Jindal The appellant is in appeal against the impugned order demanding duty on account of captive manufactured goods cleared to their job workers without payment of duty. 2. The facts of the case are that the appellant is engaged in the manufacture of automobile parts. They are also manufacturing dies which were sent to the job workers without payment of duty on the premise that these dies were used by them captively for manufacture of their final products and availed exemption under Notification No.67/95-CE dated 16.3.1995. During the course of investigation, it was found that as these dies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dies have been manufactured by the appellant in their factory and sent to the job worker for further manufacturing intermediate goods. The benefit of Notification No.67/95-CE is available to the assessee who manufactures goods which were captivley consumed in the factory of production. Admittedly, the dies have not been used captively in the factory of the appellant. Therefore, we hold that the benefit of the Notification No.67/95-CE is available to the appellant. 7. With regard to the contention raised by the learned Counsel for the appellant, it is case of Revenue neutrality, we find that if the appellant had paid duty on dies, the appellant was entitled to take Cenvat credit thereof immediately. In that circumstance, we find that is Revenue neutrality situation in view of the decision of this Tribunal in the case of Hartech Plastics Limited (supra) wherein this Tribunal has observed as under: 5. The appellant manufactures moulds and used the same within their factory for manufacture of moulded parts and are eligible to the benefit of Notification No.67/95-C.E., dated 16-3-1995. This cannot be subjected to duty only on the ground that invoices have been raised and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ively, if a manufacturer avails exemption on intermediate product under Notification No.67/95-C.E. and chooses to pay duty on the cement when cleared to SEZ unit/developer, the duty paid on final product will be fully available to him as refund/rebate. Thus, on both counts the issue is purely revenue neutral. It is not the intention of the Government to demand duty on the intermediate product having considered that the supplies to SEZ are exports. Therefore, the demand of duty on the intermediate product clinker used in manufacture of cement supplied to SEZ units/developers is clearly revenue neutral as the appellants could have claimed refund or availed Cenvat credit. In this regard, as rightly held by the Tribunal in the case of Reliance (supra) demand of duty on intermediate products will only increase scriptory work with no benefit to the revenue. Relevant para is extracted below : The Tribunal in 6. the case of CCE, Surat v. Reliance Industries Ltd. - [2004 (167) E.L.T. 118 (Tri. - Mumbai)], while dealing with an identical captive consumption Notification No.217/85-C.E. has followed the earlier decision of the Tribunal in the case of M/s. Bajaj Tempo Ltd. v. CCE - [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court has held in numerous judicial pronouncements that the assessee is required to fulfil the conditions in a notification stricto senso and conditions conditions are not found to be fulfilled, the benefit of notification cannot be granted. The main argument of the Ld. Advocate is that the situation is revenue neutral, hence, there is no intent to evade duty. I find that if the Revenue neutrality is the only ground for non payment of duty, the same cannot be justified for irregular availment of notification. If such an argument is accepted, it would lead any manufacturer to avail the benefit of a notification and, after being caught, would take the ground of Revenue neutrality as the buyer would have availed Cenvat credit. Such an approach would open floodgate for misuse of exemption notifications. Hence, the plea of revenue neutrality is not tenable. In this context, it is pertinent to refer to the case of Star Industries vs.CC (Imports), Raigad-2015 (324) ELT 656 (SC), wherein Hon'ble Supreme Court has held as below on the issue of Revenue neutrality: 35 . It was submitted by the learned counsel for the assessee that the entire exercise is Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re applicable is completely untenable. 15. The case laws cited by the appellant have no applicability to the facts of the present case for following reasons:- (i) In the case of Ultratech Cements Ltd. Vs. CCE, Tiruchirapalli (supra) the benefit of Notification No. 67/1995-CE on the clinker manufactured and consumed captively in the manufacture of Cement and cleared to SEZ units/developers was denied and excise duty was demanded on such clinker. In these circumstances, the demand of duty on intermediate product namely clinker used in the manufacture of Cement supplied to SEZ units/developers was held to be revenue neutral as assessee himself was eligible to avail Cenvat Credit. The facts in the present case are totally different as the dies were never consumed within the factory and had in fact gone out of the factory of production to the premises of the job worker. Besides, assessee is not eligible for Cenvat Credit himself unlike in the relied upon decision. Hence, this case law does not help the appellants. (ii) In the other case law relied upon by the appellants of Hartech Plastics Ltd. Vs CCE, New Delhi (supra), the facts are that there was inter unit transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was recovered while manufacturing batteries, was exempt from levy of excise duty and the appellants was entitled to get the benefit of Modvat scheme. In the present case, no such plea of bonafide belief has been taken and the same is understandable because the wording of notification is very clear. Besides, the appellant himself is not entitled to Cenvat Credit. Hence, the said decision is not applicable to the facts of this case. (ii) The case law of Jay Yuhshin Ltd. Vs. CCE, New Delhi-2000 (119) ELT 718 (Tri. -LB) is also not applicable to this case. In the said case it has been held that revenue neutrality situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assesses manufactured goods. Such a situation does not exist in the present case as the appellant and job worker are different manufacturers and credit is not available to the appellant himself. Hence, the ruling in the Jay Yuhshin Ltd. Vs. CCE, New Delhi does not apply to this case. If anything, the conclusion in Para 13(b) of judgment goes against the appellant. 17. Since there was wilful suppression, the penalty under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neutral. 23. Having considered rival contention and on perusal of the records, I find that the provisions of clause (b) of sub-rule 5 of Rule 4 of Cenvat Credit 2001 provide that if moulds are brought into the factory by a manufacturer, he is eligible for availment of Cenvat Credit of duty paid on the same. Further, the manufacturer of the goods is required to pay Central Excise duty on the goods manufactured. Incidentally, in the present case, the manufacturers of moulds and the legal entity eligible to avail Cenvat Credit of duty so paid is one and the same, on following all the provisions of law, the situation emerges that the appellant is required to debit their Cenvat Account for payment of Central Excise duty on the moulds manufactured by them and removed to the job-worker under said provisions of Rule 4 (5) (b) and further they are eligible to take Cenvat Credit of the same duty paid. Therefore, I find that this situation is revenue neutral. I therefore, agree with the views of Brother Member (Judicial). 24. With the above opinion, I return the file back to the Division Bench. (Anil G. Shakkarwar) Member (Technical) MAJORITY ORDER In view of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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