Tribunal Overturns Order: Raw Material Suppliers Responsible for Compliance, Simultaneous Benefits Permissible.

The appellate tribunal determined that the impugned order was not legally sound, setting it aside and allowing the appeal, with consequential relief if necessary. The tribunal held that compliance with Notification No. 214/86 was the responsibility of raw material suppliers, not the job worker. Additionally, the alleged simultaneous benefits under Notifications No. 175/86 and Modvat credit were permissible as they pertained to different goods. The judgment was pronounced in open court on 28-12-2004.

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Issues involved:
The issues involved in the judgment are the contravention of Central Excise Rules by the appellant, demand of duty on job work done, denial of benefit of Notification No. 214/86 to the appellant, and alleged availment of simultaneous benefits under Notification No. 175/86 and Modvat credit.

Contravention of Central Excise Rules:
The appellant was alleged to have contravened Central Excise Rules by manufacturing and clearing FBC Boiler parts without determining the correct central excise duty leviable and without payment of Central Excise duty. The duty demanded was Rs. 31,294, with a penalty imposed in accordance with Section 11AC and Rule 173Q of the CE Rules, 1944.

Denial of Benefit of Notification No. 214/86:
The appellant undertook job work for suppliers of raw materials under Notification No. 214/86. The show cause notice alleged contravention by the appellant, but the responsibility of compliance with the notification was on the suppliers of the raw materials, not the job worker. The appellant returned processed goods to the suppliers, and the authorities should have sought details from the suppliers before demanding duty from the job worker.

Alleged Availment of Simultaneous Benefits:
Although there was no initial allegation regarding simultaneous benefit under Notification No. 175/86 and Modvat credit, both authorities below addressed this issue. However, simultaneous availment of SSI exemption and Modvat credit is permissible on different goods. The goods in question fell under different headings, so there was no basis for any charge against the appellant.

In conclusion, the appellate tribunal found that the impugned order was not legal and proper. The tribunal set aside the order and allowed the appeal, providing consequential relief if necessary. The responsibility of compliance with Notification No. 214/86 was on the suppliers of raw materials, not the job worker, and the alleged simultaneous benefits under different notifications were permissible. The judgment was pronounced in open court on 28-12-2004.

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