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TMI Blog2024 (7) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... e it was held that ' No duty has been discharged by appellants. The adjudicating authority has found merit with the arguments of appellants that Notification No.214/86-CE is not an exemption Notification but it is merely postponing payment of duty at the time and removal of finished goods by principal manufacturer. However having come to this 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. ' The impugned order is set aside - appeal allowed. - HON BLE MR. P. DINESHA , MEMBER ( JUDICIAL ) And HON BLE MR. VASA SESHAGIRI RAO , MEMBER ( TECHNICAL ) For the Appellant : Shri A. S. Monappa , Advocate For the Respondent : Shri Harendra Singh Pal , Authorized Representative ORDER Order : [ Per Mr. VASA SESHAGIRI RAO ] Brief facts of the Excise Appeal No. 40468 of 2015 are that the Appellant viz., M/s. Deccan Alloys Pvt. Ltd. are engaged in the manufacture of TMT Bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted goods and therefore the Appellant was required to maintain separate inventory of accounts and inputs used in the manufacture of dutiable goods and exempted goods. Therefore, the Appellant were required to pay an amount equal to 10% / 5% on the value of exempted goods in terms of Rule 6(3)(b) / 6(3)(i) of the CENVAT Credit Rules, 2004. However, the main contention of the Appellant was that the job worked goods cannot be treated as exempted goods as the Notification No. 214/86-CE dated 25.03.1986 was not an exemption notification and that duty payment is merely postponed and the liability to duty payment is placed on the principal manufacturer who have supplied the raw-materials. 3.1 Representing the appellant, the Ld. Advocate A.S. Monappa has argued that they availed CENVAT credit on Furnace Oil as a Job Worker, that MS Ingots and MS Billets received from the principal manufacturer were converted into rolled products which themselves are finished products and which are cleared by the principal manufacturer on payment of duty. He has mainly contended that the manufactured goods cleared by the job worker without payment of duty after job work under the provisions of Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 The Notification No. 214/86-CE dt. 25.03.1986 does not exempt the goods manufactured by a job worker unconditionally but merely postpones the time 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. In support of their contention that job worked goods are not exempted goods and the Notification No. 214/86-CE dated 25.03.1986 is not an exemption Notification and they have correctly availed CENVAT credit on Furnace Oil used in job work. The appellant has relied on the case laws as given below:- i. Commissioner of Central Excise, Ludhiana Vs. Modi Sales [2010 (253) ELT 782 (P H)] ii. Vishal Pipes Ltd. Vs. Commissioner of Central Excise, Noida [2011 (263) ELT 81 (P H)] iii. Commissioner of Central Excise Vs. Happy Forging Ltd. [2011 (265) ELT 197 (P H)] 3.5 He has also averred that 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. They were under a bonafide belief that they were eligible for CENVAT credit on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfies the definition of the term input but the furnace oil used in the manufacture of finished goods on behalf of the principal manufacturer does not satisfy the definition of inputs, as the rolled products manufactured on job work basis are the final products of the principal manufacturer and not the final products of the Appellant. 9. We find that the above issue is no more res integra as in the appellant s own case, the issue was decided in favor of the appellant for the earlier periods by the Tribunal vide its Final Order Nos. 42077-42079/2018 dated 18.07.2018. The relevant portion of the decision is extracted below:- 7. The show cause notices from which the proceedings are initiated have found fault with the appellants for not having maintained separate accounts for common input (furnace oil) on the ground that such input is being used in the manufacture of dutiable goods manufactured on the appellant s own goods and goods manufactured on job work for principal manufacturer. No duty has been discharged by appellants. The adjudicating authority has found merit with the arguments of appellants that Notification No.214/86-CE is not an exemption Notification but it is merely p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable 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 for not forcing any job worker to avail the benefit of Notification No. 214/86-C.E., dated 25-3-1986. The job worker is not expected or required to know the nature of disposal of job-worked goods sent by him to the supplier. The condition regarding payment of the duty on the final products manufactured using job-worked items sent by the job worker is to be fulfilled by the principal manufacturer. The job worker cannot be expected to compel the principal manufacturer to take over the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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