2008 (8) TMI 783 - HC - Central Excise

Appeal dismissed: job worker must pay duty unless Rule 57F(3) procedure used; manufacturer can claim Cenvat/Modvat credit

HC dismissed the appeal, affirming the Tribunal's reliance on the Supreme Court's ruling that job workers may clear goods on payment of duty with the ... Cenvat/Modvat - eligibility for job workers under Rule 57F - duty payment on final products - As decided by CESTAT [2004 (12) TMI 108 - CESTAT, MUMBAI (LB)] job worker could have cleared the goods on payment of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job worker's end at the time of clearance of the goods, but ultimately gets paid at the manufacturer's end. HELD THAT:- The entire judgment of the Tribunal is solely based on the law laid down by the Supreme Court in the case of Escorts Limited [2004 (8) TMI 106 - SUPREME COURT] as said Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C. The learned counsel appearing for the appellant is not able to point out any reason not to follow the decision of the Supreme Court. No question of law arises in this appeal. Hence, rejected. Issues: Whether the appeal raises any question of law requiring interference, or whether the Tribunal's decision should be followed in view of the binding Supreme Court decision relied upon by the Tribunal.Analysis: The Tribunal's judgment is based exclusively on the law laid down by the Supreme Court in Escorts Limited v. Commissioner of Central Excise. The Court examined whether any distinguishable reason existed to depart from that precedent or whether a question of law was posed that warranted interference. The appellant's counsel was unable to identify any such reason or question of law, and the Court found no basis to decline application of the controlling Supreme Court authority.Conclusion: The appeal does not raise any question of law and is rejected; the outcome is in favour of the assessee.Ratio Decidendi: Where a tribunal's decision is founded on a binding Supreme Court precedent and no substantial question of law or distinguishing circumstance is shown, the appellate court will refuse to interfere and dismiss the appeal.