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TMI Blog2022 (5) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... le (1) of Rule 6, the assessee is not required to avail the Cenvat credit in respect of the inputs used in the manufacture of exempted goods. As per the fact of the present case it is undisputed fact that the appellant during the impugned period not registered with the Central Excise Department, hence, has not availed the Cenvat credit in respect of any of the inputs used either in the final product or in the intermediate product i.e.,Brass Casted Rods. Therefore, the condition of sub-rule (1) of Rule 6 stands complied with. The finding of the adjudicating authority as regard the applicability of above notification is misleading and absolutely incorrect - the appellant has discharged the obligation under Rule 6(1) accordingly they are legally entitled for the exemption Notification No. 67/95-C.E., dated 16-3-1995 in respect of their intermediate product i.e., Brass Casted Rods. In the present matter appellant also claimed exemption alternately under the provisions of Notification No. 08/2003 -CE dated 01.03.2003. Since as per the finding appellant are legally entitled for the exemption Notification No. 67/95-C.Edated 16.03.1995 in respect of their intermediate products i.e. Brass C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to Brass Cast Rods as department has demanded duty on that only. Appellant has not claimed the above Sr. No. 2 for parts of Agriculture Equipments which are exempted. 3.2 He further submits that goods manufactured on Job Work basis is exempted from duty of excise under Notification No. 83/94-C.E. dated 11.04.1994 and applies to intermediate goods. The Notification No. 84/94-C.E. dated 11.04.1994 applies to waste and scrap sent to Job Worker for manufacture of intermediate goods. Therefore, confirmation of demand of Rs. 3,94,46,239/- on intermediate goods got manufactured on Job Work basis is also liable to be quashed. Without prejudice he also submits that if it is upheld that duty of excise is payable on intermediate goods than it is admissible for set off against Cenvat Credit of duty paid on Brass Scrap. 3.3 He also argued that demand was barred by limitation as prior to impugned notice, premises was searched on 21.03.2006, the department has also issued SCN dated 21.06.2006. Appellant filed undertaking as provided under Notification No. 83/94-CE and 84/94 CE both dated 11.04.1994 and declaration under Notification No. 36/2001-CE (NT) dated 26.06.2011 as amended f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption Notification No. 67/95-C.E. in respect of intermediate products viz. Brass Casted Rod used captively for manufacture of exempted goods on the ground that the exemption contained in the said Notification does not apply to inputs used in or in relation to the manufacture of final products which are exempted from the whole of duty of excise leviable thereon or are chargeable to 'NIL' rate of duty. For better understanding we reproduce the Notification No. 67/95 as below: "C. CAPTIVE CONSUMPTION (GOODS USED WITHIN FACTORY OF PRODUCTION) GENERAL EXEMPTION NO. 6 Exemption to all capital goods and inputs if captively consumed within the factory of production. - In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), (herein after referred to as the said Special Importance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts - (i) capital goods as defined in rule 3 of the Cenvat Credit Rules, 2002 manufactured in a factory and use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the whole of the duty of excise or chargeable to nil rate of duty. However, though the exemption is not available to the intermediate goods used in the exempted goods but exception was provided that even if the final product is exempted and the assessee discharge the obligation prescribed in Rule 6 of Cenvat Credit Rules, then in spite of the final product is exempted, the exemption on the intermediate goods is available in terms of the aforesaid notification. Now we have to see whether the appellant have discharged the obligation under Rule 6 of Cenvat Credit Rules, which is reproduced below: "Rule 6. Obligation of manufacturer of dutiable and exempted goods. - (1) The Cenvat credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2). (2) Where a manufacturer avails of Cenvat credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a job work and used in the manufacture of final products or cleared as such from the factory of supplier of raw materials or semi- finished goods on payment of duty or as specified therein. ii. Notification No. 83/94-CE dated 11.04.94 as amended, which exempts goods specified in the SSI Exemption Notification No. 8/2003-CE and 9/2003-CE if manufactured on Job Work basis. iii. Notification No. 84/94-CE dated 11.04.94 as amended, which exempts goods specified in the SSI Exemption Notification No. 8/2003-CE and 9/2003-CE, if cleared for job work. From the above it can be seen that the above notification mainly provides for exemption to the Job Work activity and cast duty liability on the principal manufacturer on whose behalf the job worker under takes manufacturing of the goods. It does not erase the duty liability just because the goods are manufactured on job work basis. The goods undergo duty liability at the hands of the principal manufacturer on behalf of whom the Job Worker manufacturers the goods or process the raw materials or semi-finished goods. 37.1 I find that the said party have cleared their raw materials or semi-finished goods to the job-worker and received i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking. Therefore, benefit of said notification cannot be denied on this ground alone. 5.4 Without prejudice, as regard the said issue we also find that even if the benefit of job-work notification denied to the Appellant, the duty liability rests on the job worker. Therefore, the show cause notice demanding duty from the Appellant on the goods manufactured by the Job-worker cannot be sustained. Once the Revenue took a view that the inputs could not have been sent to a job worker claiming the Job-work exemption Notifications and the process undertaken by the job worker amounted to manufacture and resulted in products namely, Brass Casted Rods, the duty liability would fall on the manufacturer who is a job worker in this case and not on the appellant. Since duty demand has been made on Brass Casted Rods and the appellant is not a manufacturer of the same, the demand is not sustainable and accordingly, the impugned order demanding duty from appellant is legally not correct. We find that the larger bench of Hon'ble CESTAT in the matter of M/s Thermax Babcock & Wilcox Ltd. Vs Commissioner of C.Ex. Pune -I, reported at 2018(364) ELT 945 (Tri. -LB) held that: 8. As per above dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arging the duty leviable on the finished products and not on the goods manufactured on job work basis. The Adjudicating authority has rightly relied upon the decision in the case of JinaBakul Forge Pvt. Ltd. (supra). Accordingly, we uphold the demand of Central Excise Duty as confirmed by the Commissioner (Appeals) in the impugned Orders." Similarly, the tribunal in the matter of M/s Senor Metals Pvt. Ltd. Vs Commissioner of C.Ex. & S.T., Rajkot - 2014(308) ELT 491 (Tri. Ahmd) held that: Heard both sides and perused the case records. The first issue which is required to be deliberated upon whether appellant is required to discharge duty liability on certain intermediate goods which come into existence in their factory premises which are not "specified goods" under Notification No. 8/2003-C.E., dated 1-3-2003 as amended by Notification No. 8/2006-C.E., dated 1-3-2006. It is observed from Sr. No. (xxiv) of annexure to Notification No. 8/2003-C.E., dated 1-3-2003 and Sr. No. (xxxii) to (xxiv) of annexure to Notification No. 8/2006-C.E., dated 1-3-2006 that certain categories of copper articles are not eligible to small scale exemption. The opening paragraph of the Notification Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 5. ……………………………… 6. ……………………………… 7. ……………………………… 8. We have considered the submissions. We are unable to accept the contention of the appellants. The Tribunal‟s majority decision in Dukart and Company case (supra) would not apply to the facts of the case before us. That decision primarily dealt with the aspect of computation of aggregate value of certain specified goods captively consumed used for further manufacture of specified goods within the factory of production of inputs. The question of clearances of goods by job worker did not arise in that case. In the facts and circumstances of the instant case, the question relates to the availability of slab exemption to job workers where certain intermediate goods are manufactured during the process of job work. Further, it is also not permissible to extend the ratio of a decision interpreting one notification to another notification, since the objects of the two notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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