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TMI Blog2018 (9) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. falling under Chapter No.72 of the Central Excise Tariff on their own account and also on job work basis. The appellant is availing cenvat credit of the inputs used in the manufacture of the said finished goods. The appellant had availed cenvat credit on the furnace oil which was used for reheating the ingots / billets used in the manufacture of the finished goods manufactured on their own account and also on job work basis. The ingots / billets were received for conversion into TMT bars on job work basis, under challans in terms of Rule 4 (5) (a) of the Central Credit Rules,2004 and the said finished goods was sent back to the principal manufacturer after job work without payment of duty in terms of Notification No.214/86 dated 25.03.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of penalty imposed 1. E/338/2012 09/2012 dated 14.2.2012 June 2005 to Jan 2010 Rs.1,15,59,500/- Rs.1,15,59,500/- u/s 11AC of the Central Excise Act. 2. E/337/2012 10/2012 dated 14.2.2012 Feb 2010 to Oct 2010 Rs.30,06,865/- Rs.3,00,700/- under Rule 15 of Cenvat Credit Rules. 3. E/339/2012 11/2012 dated 14.2.2012 Nov 2010 to May 2011 Rs.34,92,403/- Rs.3,49,240/- under Rule 15 of Cenvat Credit Rules. 4. Today when the mater came up for hearing, on behalf of the appellant, Ld. Counsel Shri A.S. Monappa submits that the in the show cause notices the said demand was proposed on the ground that cenvat credit was availed on the duty paid for entire quantity of furnace oil received by the appellant and the furnace oil stored ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment of duty and shifts the liability to pay duty on the principal manufacturer. The goods cleared by the appellant without payment of duty after job work under Notification No.214/86, are therefore not exempted goods. iv) Without prejudice to other arguments, the imposition of penalties is unjustified since there has been no suppression of facts on the part of appellants with intent to evade payment of duty. Appellants were under a bonafide belief that they were eligible for cenvat credit on the input (furnace oil) used in the manufacture of the final product both for on their own behalf and on behalf of the principal manufacturer. 5. On the other hand, Ld. A.R Shri K. Veerabhadra Reddy supported the impugned orders. He submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion, the adjudicating authority has held that there is yet another condition that input should be used by manufacturer of final products, and has held that since appellants are not manufacturer of final products, the credit availed on furnace oil used by them for job work basis cannot be allowed since the same are not used for final products of the appellants. This being so, we find merit in the Ld. Advocate's contention that adjudicating authorities have gone beyond the scope of the SCNs. The adjudicating authorities have surely changed the goal post to a proposition which was not at all presented in the SCNs. On this very ground, we find that impugned orders will suffer from infirmity of having gone beyond the scope of SCNs and ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to use them for further manufacture of excisable goods which are ultimately cleared on payment of duty. In other words, it does not exempt the duty on the job-worked items but it merely shifts the liability to a person other than the job worker and also shifts the date of payment of duty that is instead of reckoning from the date of clearance from the premises of the job worker, the same is to be reckoned from the date of clearance by the principal manufacturer (the person who supplied material to the job worker for the purpose of getting job work done). To consider this notification as an unconditional notification and to hold that the job worker-appellant should not have paid the duty may not be appropriate. 10.3 There is another reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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