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 principal manufacturer later claiming Cenvat/Modvat credit. The court held that only the special procedure under Rule 57F(3) permits non-payment by the job worker at clearance, with duty ultimately payable by the manufacturer, and that credits for inputs used in final products cleared without duty (but subsequently duty-paid by the principal) are not barred by Rule 57C. No question of law arose.

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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.

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