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TMI Blog2024 (3) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant or, in the alternative, its actual deployment in the finished product having been demonstrated. In doing so, the adjudicating authority has discarded the permission accorded by jurisdictional office for clearance from the premises of the contracted entity and, that too, by disclaim of job worker status. The availment of credit of ₹ 2,41,49,130 rests upon rule 3 of CENVAT Credit Rules, 2004 which is predicated upon discharge of duty liability and upon conformity with inputs in rule 2 thereof. The denial has been grounded on non-receipt at premises of the appellant. In doing so, the adjudicating authority has not examined the implied extending of the premises of manufacturer to that of job-worker which is implicit in the excise duty liability revolving on job-worker that becomes eligible credit in the account of the principal manufacturer upon bearing incidence of duty liability. That the impugned order has discarded claim of job-worker status, and inadequately so, precluding consideration of this eligibility hinders us from deciding thereto warrants rectification. The dispute warrants fresh determination within the framework of the observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem are not used for conversion but merely as requirements of vendors who were portrayed as job-workers for fitment within such privilege. A further allegation is that the goods manufactured by the vendors are directly used in the power packs but the invoices issued to appellant were used to avail credit to which they were not entitled as the goods did not arrive at the premises of the appellant. 4. Learned Counsel for appellant submitted that, generally, electric motors , heat exchanger , filters and filter elements , hydraulic valves , hydraulic pumps , manifold blocks , electric junction boxes etc were supplied to their job-workers on which CENVAT credit had been availed at the time of procurement and as these were transferred against delivery challan , owing to which reversal of credit as per rule 4(5)(a) of CENVAT Credit Rules, 2004 was not required. It was pointed out manufacture was effected by job work as it occurs in accordance with plans furnished by, and on instructions of, the appellant with consideration being job work charges and cost of materials used in such manufacture entitling excise duty paid thereon to be availed as credit as afforded by C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with cost of other material deployed in finished goods along with contracted charges. The case of central excise authorities is that credit was availed by appellant on both categories of materials of which that pertaining to material supplied by them should have been reversed as the product in which these had been used were not returned to them while other material used by the contracted entity, even though charged to the appellant, was ineligible for availment as these had not been received in premises of appellant. 8. To fortify the conclusion of ineligibility, the adjudicating authority premised the status of the contracting entity as vendor against the claim of the appellant that these were job workers and, thereby, that appellant is not a manufacturer with consequence of not being covered by CENVAT credit facilitation. Before we proceed to discuss the pros and cons of this exercise, we must necessarily look to the provision that the appellant, according to central excise authorities, was required to be compliant with. 9. It must be made clear that Central Excise Act, 1944 is a law empowering levy and collection of an indirect tax on manufacture and is not a law for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon clearance does not appear to have guided the determination of this dispute. 11. Underlying the existence of CENVAT credit scheme is the empowerment vested by law to prescribe the manner of payment of duty, which itself is a function of classification, in terms of the charging provision, and value, in terms of the valuation provision, comprising actual payment and debit of CENVAT balance. The scheme enables bridging of the charging and valuation provisions to restrict the collection of duty to value added by a manufacturer. CENVAT Credit Rules, 2004 is a compilation of machinery provisions for operation of the scheme. The principle of manufacturer being charged to duty on manufacture is the tool to interpret ambiguity, if any, in the said Rules, and not appearing to have impressed itself on the adjudicating authority evident from the stated preference for assigning expression unacknowledged by law, precludes us from applying the test in the absence of the first finding as noted by us supra. 12. The CENVAT credit scheme rests upon availment of credit and its continued existence till utilization; there is, therefore, threshold entitlement flowing from rule 3 of CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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