Customs, Excise and Gold Tribunal - Delhi
Rico Auto Industries Ltd. vs Cce on 23 July, 2002
Equivalent citations: 2002(105)ECR641(TRI.-DELHI)
ORDER G.R. Sharma, Member (T)
1. M/s. Rico Auto Industries Ltd. have filed these three appeals. Since the issue in all the three appeals is the same, they were heard together and are being disposed of by this common order. In the impugned order, Ld. Commissioner disallowed Modvat credit, demanded interest, confiscated dies and imposed penalty.
2. The facts of the case in brief are that the appellants are engaged in the manufacture of clutch assembly, fly wheel components, disk components, pressure fly wheel, disc clutch fly pressure etc. They imported 13 sets of dies. They applied for permission of the Commissioner of Central Excise for removing six sets of dies under the provisions of Rule 57S(8) of Central Excise Rules, 44 to M/s. Rico Auto Industries Ltd. M/s. Rico Auto Industries Ltd. was to make use of the said dies in the manufacture of parts and accessories of motor vehicles on behalf of the appellant. Ld. Commissioner accorded permission for removal subject to observance of provisions of Rule 57S(9) and 57S(10). M/s. Rico Auto Industries Ltd. made use of these dies for the manufacture of various components. The Officers of Central Excise conducted enquiries and recorded statements. A SCN was issued to the appellants contending that Modvat credit taken by the appellants on the dies in question is not correct inasmuch as Rico Auto Industries Ltd. cannot be considered as a job worker in terms of Rule 57S(8) of Central Excise Rules, 44. They also alleged suppression of facts. The appellant in reply to the SCN filed detailed reply contending that the dies in question have been removed in terms of Rule 57S(8) for manufacturing components and therefore, the appellants should be treated as job worker. The Commissioner decided the issue, confirmed demand of duty, imposed penalty and demanded interest as indicated above.
3. Arguing the case for the appellant Shri B.L. Narshiman, Ld. Counsel submits that the issue in their case was squarely covered by the decision of this Tribunal in the case of Monica Electronics v. CCE reported in 2000 (123) ELT 1047. He submits that in para 4 of the decision, this Tribunal held On a close reading of the said three sub-rules, it does not appear that the rule making authority had any intention to give the expression 'job worker' used in Sub Rule (8), the meaning given to it in the exemption Notifications like Notification No. 214/86. In the said notification the 'job worker' is supplied with raw-material by the manufacturer and the job worker clears the manufactured goods from his factory after utilising the raw materials supplied by the manufacturer. The intention is to exempt the 'job worker' of duty liability as a manufacturer. In the facts of the present case, the moulds are capital goods. They are not materials which get consumed in the process of manufacture by the job worker. The scheme of Rule 57S and Sub-rules (8) to (10) thereof does not therefore appear to be compatible with the definition of job worker in the said notifications. We, therefore, find that there is force in contention of the Ld. Counsel that any interpretation of 'job-worker' in Sub-rule (8) to (10) of Rule 57S as having the same meaning it has in the Exemption Notifications will distort the said provisions and make it unworkable. We also find that the decisions relied on by the Commissioner do not deal with the question of applicability of definition of 'job worker' in other notifications to provisions of Rule 57S(8). In the above view of the matter, we are unable to agree with the reasoning given by the Commissioner in the impugned order for holding that M/s. Showpla India Ltd. is not a 'job worker' for purpose of Rule 57S(8) in the facts of the case.
4. Ld. Counsel further submitted that this decision of the Tribunal was further followed in the case of M/s. Anusika Autolite Ltd. v. CCE contained in their Final Order No. A/195/02-NB dt. 29.1.2002 in which the Tribunal in para 6 held
6. The facts of the present case are squarely covered by the ratio of the above decision of the Tribunal. The meaning assigned to the expression "job work" by the Hon'ble Supreme Court in their judgment in M/s. Prestige Engineering (India) Ltd. (Supra) cannot be made applicable to the facts of the present case since the said judgment does not deal with the subject of capital goods sent to another party for job work as is the case in the present appeal. I, therefore, allow the appeal by setting aside the impugned order of Commissioner (Appeals).
5. Ld. Counsel, therefore, submits that the ratio of the decisions of the Tribunal cited above squarely covers their case and prays that the appeals may be allowed.
6. Shri Mewa Singh, Ld. DR appearing for Revenue reiterates the findings of the authorities below.
7. We have heard the rival submissions. We have also perused the evidence on record. We note that the facts of the present case are identical to the facts in the case of Monica Electronics cited and relied upon by the appellant. We also note that the decision in Monica Electronics was further followed by the Tribunal in the case of M/s. Anusika Auto-lite Ltd. Following the ratio of the above decisions, we hold that the appellant is a job worker and entitled to the benefit accruing on that account. In the circumstances and having regard to the above discussions, we allow the appeals. Consequential relief, if any, shall be admissible to the appellants in accordance with law.
(Pronounced in the open Court).