Custom, Excise & Service Tax Tribunal
M/S Vandana Dyeing P. Ltd vs Commissioner Of Central Excise, Mumbai ... on 23 March, 2011
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. E/3769 & 3770/03
(Arising out Order-in-Appeal No. RJB/M-III/342/2003 dated 22.9.03 passed by the Commissioner of Central Excise (Appeals), Mumbai III)
For approval and signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
M/s Vandana Dyeing P. Ltd.
Appellant
Vs.
Commissioner of Central Excise, Mumbai III
Respondent
Appearance:
Shri S.S. Mani Prakash, Consultant for the appellant Shri A.K. Prabhakar, JDR for the respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) Date of hearing : 23.03.2011 Date of decision : 23.03.2011 O R D E R No:..
Per: Mr. Ashok Jindal, Member (Judicial) The brief facts of the case are that the appellant is a processor of man made fabrics. They received processed fabric on job work and sent them back to their principal under job work challan issued under Rule 4(5)(a) of the CENVAT Credit Rules, 2001. Since fabrics are not covered under Notification 214/86, duty has been demanded on such clearances on the allegation in the show-cause notice, which is reproduced herein under:-
Cenvat Rules 4(5)(a) does not provide any authority or procedure to clear the goods without payment of duty but only allows cenvat credit if the inputs or semi-finished goods are sent out side for processing. The authority under which the job worker is exempted from payment of duty is only Notification no. 214/86. The impugned orders are excluded from the scope of Notification no. 214/86. There is no other rule or Notification granting exemption to goods falling under Chapter 5801 if manufactured on job work basis. Therefore, duty demands were confirmed against the appellants along with interest and penalties. Aggrieved from the said orders, appellants are before us.
2. The ld. advocate for the appellants submits that the subject clearances under job work challan issued under Rule 4(5)(a) did not attract a duty as held by this Tribunal in the case of Mukesh Inds. vs. CCE 2009 (248) ELT 203 (T-Ahd) and Akash Fashions Pvt. Ltd. reported in 2009 (245) ELT 871 (T-Ahd).
3. Heard and considered.
4. On careful consideration of the submissions, the appellants are receiving goods from their principal under the cover of challan issued under Rule 4(5)(a) of the CENVAT credit Rules, 2001 and after completion of the job work, goods were returned to their principal manufacturer. The fact that the said goods are not specified in the Notification no. 214/86-CE will not make a difference as the job work was being done under the provision of Rule 4(5)(a) which is pari material to Rule 57F(4). In series of cases, this Tribunal has held that benefit of Rule 57F(4) of the Central Excise Rules cannot be modulated by Notification 214/86 CE dated 25.3.86. In the case of Mukesh Inds. (supra) this Tribunal has relied on the decision of Trico Process P. Ltd. 2005 (189) ELT 126 (T) wherein it was held that inputs returned to principal manufacturer, no demand can be sustained against job worker in terms of provisions of Rule 57F(4) of the Rules or under Rule 4(5)(a) of the CENVAT Credit Rules, 2001. Therefore, the Tribunal held that no demand is sustainable in such a situation.
5. By applying the ratio of law, laid down by this Tribunal in the above cited cases, to the facts of the case in hand, we hold that there is no dispute about the fact that appellant is a job worker who did the process on the goods received from the manufacturer. Therefore, we hold that no duty liability can be fastened upon him even if the goods are not specified under Notification 214/86-CE. As it has been concluded in the above cited judgment that provisions of Rule 4(5)(a) of CENVAT credit are independent of the Notification. With these observations, we set aside the impugned orders and allow the appeals of the appellants with consequential relief.
(P.R. Chandrasekharan) (Ashok Jindal) Member (Technical) Member (Judicial) SR 4