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TMI Blog2019 (8) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... ntradiction in the demand; implied in the proposal for demand of differential duty is the acceptance of the validity of partial liability already discharged by the job-worker with the principal manufacturer called upon to pay only that portion arising from application of the provisions in the rules of valuation pertaining to sale to unrelated person - In view of this contradictory stand adopted by the original authority, and sustained in the order of the first appellate authority, rule 12B of Central Excise Rules, 2002 has been completely and totally mis-interpreted - the deemed exercise of option is upheld and the duty liability limited to such as already been discharged by M/s Just Textiles Pvt Ltd. Valuation - goods cleared by M/s Just Export Pvt Ltd to M/s Just Textiles Ltd for further manufacturing - HELD THAT:- Once the duty liability has been discharged on the goods as a finished product and no new product comes into existence in the hands of M/s Just Exports Pvt Ltd, the transfer thereof to M/s Just Textiles Ltd for manufacture of other garments cannot be subject to duty liability under Central Excise Act, 1944. On the garments manufactured by the latter, there is no e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12B. Job work in textiles and textile articles;- (1) Notwithstanding anything contained in these rules, every person (not being an export-oriented unit or a unit located in special economic zone) who gets yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act, produced or manufactured on his account, on job work (herein after referred to as ( the said person ) shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with all the relevant provisions of these rules, as if he is an assessee: Provided that the job worker may, at his option, agree to obtain registration, maintain accounts, pay the duty leviable on such goods, prepare the invoice and comply with the other provisions of these rules. In such a case the provisions of these rules shall not apply to the said person. The job worker, may, at his option, authorize the said person to, on his behalf as his agent, maintain accounts, pay duty, prepare invoice and comply with any of the provisions of these rule except that of rule 9: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son is registered; (iii) the description, quantity (in terms of kg. /m/ Sq. m) and the value of the goods being sent for the job work; (iv) the date of dispatch of such goods; and (v) the name and address of the job worker. (c) The document pertaining to movement of goods from a job worker to another job worker or from a job worker to the said person shall contain, - (i) the name and address of the job worker (the sender). (ii) the description and quantity (in terms of kg. /m/ Sq. m) of the goods being sent. (iii) the date of dispatch of such goods. (iv) the name and address of the job worker/the said person to whom the goods are being sent (the receiver). (d) The responsibility in respect of accountably of the goods, referred to in sub-rule (3) shall lie on the said person. (5) The job worker, on receipt of the goods mentioned in sub-rule (3) or, as the case may be, from another job worker sent by him in terms of clause (ii) to sub-rule (7), shall duly acknowledge the receipt of the goods on the said document. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial price since the same was higher than the price to unrelated parties. In these circumstances, we find no merit in the findings of the Commissioner (Appeals). Further, reliance is also plead on the decision of the Tribunal in Kitex Ltd v. Commissioner of Central Excise, Cochin [2008 (225) ELT 446 (Tri.Bang.)] and whose finding of 7. On a very careful consideration of the entire issue, we find that the entire demand consists of two parts. The major portion relates to the valuation of the goods cleared from the job worker s premises and later sold by the appellants. A part of the demand relates to the grey fabrics manufactured prior to 31-3-2003 and cleared and sold thereafter. As regards the major demand on account of the alleged under-valuation, after going through Rule 12B and also the Board s Circular issued, we are of the opinion that in terms of Rule 12B a trader or any person can purchase raw materials and get textile goods manufactured from a job worker. In all such cases, the job worker is considered as a manufacturer. It is also well-settled that the supplier of raw material is not the actual manufacturer and the job worker is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral excise authorities to take an entirely different stand to fasten liability for the same duty paid goods on the principal manufacturer. Under rule 12B of Central Excise Rules, 2002, the said person can only be one or the other and, if the stand of the lower authority is accepted, we find that there is an inherent contradiction in the demand; implied in the proposal for demand of differential duty is the acceptance of the validity of partial liability already discharged by the job-worker with the principal manufacturer called upon to pay only that portion arising from application of the provisions in the rules of valuation pertaining to sale to unrelated person. In view of this contradictory stand adopted by the original authority, and sustained in the order of the first appellate authority, we find that rule 12B of Central Excise Rules, 2002 has been completely and totally mis-interpreted. We uphold the deemed exercise of option and limit the duty liability to such as already been discharged by M/s Just Textiles Pvt Ltd. 5. The second issue pertains to the duty liability on the goods cleared by M/s Just Export Pvt Ltd to M/s Just Textiles Ltd for further manu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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