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TMI Blog2023 (9) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... om failure to reverse credit to the extent of such deployment, rule 14 and rule 15 of CENVAT Credit Rules, 2004 come into play. 2. The appellant, a manufacturer of 'galvanized pipes' and 'MS black pipes' in their own right, also undertakes 'job work' production in which their own inputs are consumed along with that supplied by the principal. On clearances effected as 'job worker', duty liability is deferred, and displaced to the principal, upon assumption of that obligation by principal in terms of notification supra. Notice was issued for recovery of Rs.26,64,757 included as duties of central excise on procurement of 'furnace oil' and 'chemicals and paints' on the premise allegedly to have been originally availed as CENVAT credit between April 2006 and February 2011 that, with those clearances being exempt, the appellant was required to reverse in proportion to consumption of inputs in such production. 3. The original authority dropped proceedings that was reversed by Commissioner of Central Excise (Appeals), Mumbai Zone - I leading to this appeal on the limited plea that the issue stands settled by the Tribunal in Jindal Polymers v. Commissioner of Central Excise, Meerut [2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job worker's end at the time of clearance of the goods, but ultimately gets paid at the manufacturer's end. In these circumstances, we are in agreement with the decision rendered in the case of Bajaj Tempo and Jindal Polymers. 4. ................ 5. ................ 6. In view of the foregoing, we answer the reference in favour of the assessee. The papers may be placed before the original Bench for passing the appropriate orders." The said decision of the Tribunal has been upheld by Hon'ble Bombay High Court (cited supra). While the decision in case of Sterlite Industries Ltd. has been given in respect of disputes which had arisen during the Modvat regime, the same argument are equally applicable to the Cenvat Credit Rules, 2004. It is seen that the decision of the Tribunal in the case of Sterlite Industries Ltd. (supra) relies on the spirit of the Modvat Rules and no specific rules. The ratio of the said judgment is equally applicable to Cenvat Credit Rules, 2004. 6. The Larger Bench of the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d take credit of such duty at each subsequent stage, starting from the basic material, turning out components and finally ending with ultimate final product. Hence, the scope of Rule 57C in such a situation like this has to be constituted in the context of the Modvat scheme and not to destroy the basic concept. 2. The revenue is denying the Modvat credit to the present job worker on the grounds that the inputs were used in the manufacture of the goods which were cleared without payment of duty. Pausing here for a second, let us take a situation where the basic inputs is sent by the principal manufacturer after debiting the Modvat credit taken by him. The job worker takes the credit of the same his factory, utilises other inputs procured directly by him after taking the Modvat credit on the same and clear the processed goods to the principal manufacturer on payment of duty and the principal manufacturer takes the credit of the same in his factory and utilises such credit for payment of duty on his final products at the time of clearance. In such a situation, there can be no objection or dispute by the revenue as regards the admissibility of the credit on the inputs received direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods on payment of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job worker's end at the time of clearance of the goods, but ultimately gets paid at the manufacturer's end. In these circumstances, we are in agreement with the decision rendered in the case of Bajaj Tempo and Jindal Polymers. 3. Apart from the above two decisions, we also note that identical view was taken in the case of Shakti Insulated Wires Ltd. v. CCE & C, Mumbai-V [2002 (149) E.L.T. 668 (Tri.) = 2002 (51) RLT 115 (CEGAT-Mum)] & also in the case of CCEx, Jaipur v. Noorani Textiles Mills [2000 (122) E.L.T. 744 (Tribunal)]. 4. In only case of Escorts Ltd. v. CC Ex, Delhi [2003 (160) E.L.T. 623 (Tri-Del.)] while interpreting Rule 57C of the Central Excise Rules, the Tribunal rejected the appellants claim of Modvat credit of duty paid on the inputs used in the manufacture of the parts, which were cleared without payment of duty to, appellant's other unit under Chapter X procedure and utilised in the manufacture of tractor which were cleared on payment of duty by observing tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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