Customs, Excise and Gold Tribunal - Mumbai
Hbl Nife Power Systems Ltd. vs Commissioner Of Central Excise on 19 March, 2003
ORDER
Gowri Shankar, Member (Technical)
1. The appellant was engaged in the manufacture of a type of electric battery in the manufacture of which silver nitrate powder form. It obtained silver powder from silver nitrate which is supplied to it by job worker Modison Ltd. The appellant supplied to Modison Ltd. quantities of silver scrap and nitric acid and other goods which were utilised by Modison Ltd. in the manufacture of silver nitrate. The appellant sought to avail of the benefit of the exemption contained in notification 214/86. This notification exempts from duty and as provided in it, it intimated the Assistant Commissioner having jurisdiction over its job worker's factory. It also sent a copy of the intimation to its jurisdictional Assistant Commissioner. The job worker manufactured the silver nitrate and cleared it without payment of duty. The notice issued to the appellant alleged that the benefit of the exemption contained in notification was not available to silver nitrate manufactured by the job worker for the reason that the batteries in the manufacture of which it was used were not cleared in an of the manners specified in the notification, but cleared without payment of duty. It therefore called upon the appellant to pay duty on the silver nitrate. In its reply, the appellant raised various contentions, one amongst which was that it was manufacture of silver nitrate which was required to pay duty and not the appellant. The Commissioner did not accept any of the contentions raised before him and confirmed the demand for duty and imposed a penalty. Hence this appeal.
2. The counsel for the appellant raised before us various contentions. Among these are, except for a small quantity the entire production of battery has been cleared either on payment of du or exported as provided in notification and therefore no du is payable. The contention that the demand for duty is barred by limitation, the extended period will not be available. He also contends that in any event, duty is payable not by it, but by Modison Ltd., who manufactured the goods, and that there is no provision in the notification to demand duty from anyone other than the supplier of the raw material.
3. The departmental representative emphasised that the appellant had wrongly declared to the officers having jurisdiction over the job worker's factory that the final product would be removed in any of the manners specified in the notification and since this has not been done, there is a little liability of duty falls upon it.
4. The notification exempts from duty goods specified in column 2 of the table annexed to it used in relation to the manufacture of the final product. Column 3 of the table on which duty of excisable is leviable in the whole or in part; or used for removal to a unit in a free trade zone or to a 100% export oriented undertaking or similar prescribed organisation, or for removal under bond for export. We are not concerned with Clause (b), the goods removed as such from the factory of the supplier of raw material. To the extent that the batteries in the manufacture of which silver nitrate were used were cleared otherwise than in the manner specified in the notification, and it is not denied that it is so with respect to some batteries, that the benefit of notification will not be available. The question that would then arise who is to pay the duty. In the normal course, it is the manufacture of the excisable goods who is liable to pay duty. The position might be different if the burden of duty has been shifted to anyone other than the manufacture. We however do not find on this notification shifts the burden to anyone other than the manufacture. Paragraph two of the notification requires the supplier of the raw material or semi finished goods to give an undertaking to the Assistant Commissioner having jurisdiction over the factory of the job worker that the goods shall be removed in any of the manners specified in paragraph 1(a) of the notification. These are identical to the manners specified in paragraph (b) i.e. payment of duty, removal under bond for export etc. It however does not go on to say that in the event of failure of any of the conditions, it is the supplier of the raw material who will have to pay the duty. In the absence of any such provision, therefore, it is the manufacturer of the goods, the job worker to whom the duty liability to rest. This is what has been decided in the decision in Desh Rolling Mills v. Commissioner 2001 (122) ELT 481 which has been followed in CCE v. Span Heat Transfer Equipment Manufacturers Pvt. Ltd. 2001 (135) ELT 861. There was therefore no basis in law in demanding duty from the appellant on the goods manufactured by the job worker.
5. The appeal is accordingly allowed and the impugned order set aside.