Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise, ... vs M/S Tirupati Fabrics & Industries Ltd., ... on 5 July, 2001
ORDER
Jyoti Balasundaram
1. The brief facts of the case are that the respondents herein are engaged in the dyeing of fabrics falling under Chapter 55 of the Schedule to the Central Excise Tariff Act, 1985. They were receiving polyester staple fibre for processing (dyeing) on job work basis from M/s Kamadgiri Synthetics Ltd., Gijarat under Rule 57F(4) challans since July, 1999. They utilised certain own modvatable inputs such as dyes and chemicals for processing of the goods, on which the assessee availed Modvat credit. The said goods after processing were cleared on payment of duty on the value equivalent to the job charges under cover of invoices issued under Rule 52A. In terms of Section 4 of the Central Excise Act read with Rule 6(b) of the Central Excise (Valuation) Rules, 1975 the duty of excise is chargeable on the value of goods including the cost of goods plus job charges etc., or on the value of comparable goods. The assessee discharged the duty liability only on the value of job charges and not on the value as determinable under Section 4. The assessable value of the goods was Rs. 56,63,997.00 on which duty payable was Rs. 9,06,241.00 (BED) plus Rs. 1,35,936.00 (AED). The assessee, however, paid duty of Rs. 2,04,622.00 as BED and Rs. 30,693.00 as AED at the time of clearance of fabrics after job work. The assessee thereby appeared to short paid duty and appeared to be liable to penalty. Thus a show-cause notice dated 04.02.2000 was issued proposing recovery of duty of Rs. 8,06,862.00 against the assessee and proposing imposition of penalty. The demand was confirmed by the Deputy Commissioner who also imposed a penalty of Rs. 1 lakh upon the respondents. The Commissioner (Appeals) allowed the appeal of the assessee by relying upon the decision of the Larger Bench of the Tribunal in the case of M/s. Tex & D.K. Processors (P) Ltd., Vs CCE, Jaipur [2000 (91) ECR 588] which was followed in the case of CCE, Jaipur Vs M/s. D.K. Processors Pvt. Ltd., [2000 (122) ELT 802]. Hence this appeal by the Revenue.
2. Although the respondents' Advocate has asked for an adjournment, we proceeded to hear the ld. SDR Shri P.K. Jain and dispose of the appeal since the issue has been settled in favour of the assessees. The finding of the Larger Bench is that duty has to be discharged by the principal manufacturer and not the job worker as otherwise Clause (ii) of Rule 57F(4) will become super fluous inasmuch as duty will be charged twice on the same goods once from the job worker and again from the modvat assessee (Principal Manufacturer). The Revenue has filed an appeal in the Supreme Court against the Larger Bench decision. However, filing of an appeal is not sufficient ground to urge that a Larger Bench decision should not be followed. Hence applying the ratio of the Larger Bench decision cited supra, we hold that the impugned order has been correctly passed, uphold the same and reject the appeal.