2018 (8) TMI 1002 - AT - Central Excise

Appellate Tribunal Upholds Commissioner's Ruling on Duty Payment for Job Work Manufacturing

The Appellate Tribunal upheld the Commissioner(Appeals) order in an appeal by the Revenue against the assessee, a manufacturer of hot re-rolled products, ... Annual capacity of production - job-work - demand was set aside on the ground that the assessee is already working under Section 3A of Central Excise Act, 1944 - Held that:- This Bench of the Tribunal in the case of CCE, Bangalore Vs. Vijaya Steels Ltd. [2009 (5) TMI 847 - CESTAT BANGALORE] has dismissed the appeal of the Revenue by relying upon the decision of the Punjab & Haryana High Court in the case of CCE, Chandigarh Vs. Dhiman Iron and Steel Industries [2006 (11) TMI 226 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH], where it was held that a special scheme for levy of excise duty is laid down therein notwithstanding scheme of Section 3 of the Act Annual capacity having been duly determined and the assessee having paid duty according to the said capacity, there is no provision by which a further duty can be demanded on the ground that assessee had done job work, which was nothing else but use of utilization of part of its manufacturing capacity. Appeal dismissed - decided against Revenue. Issues:1. Appeal against the Commissioner(Appeals) order allowing the appeal of the assessee.2. Allegation of manufacturing and clearing excisable goods without payment of duty.3. Suppression of manufacturing and clearance of goods on job work basis.4. Show-cause notice issued demanding duty, interest, and penalty.5. Confirmation of demand and penalty under Section 11AC by Joint Commissioner.6. Appeal by the assessee before the Commissioner(Appeals).7. Commissioner(Appeals) allowing the appeal of the assessee.8. Revenue filing the present appeal against the Commissioner(Appeals) order.9. Decision based on the interpretation of Section 3A of the Central Excise Act, 1944.10. Tribunal and High Court decisions influencing the Commissioner(Appeals) order.11. Application of compounded levy scheme and exclusion of general provisions in the Central Excise Act.12. Dismissal of Revenue's appeal by the High Court based on annual capacity determination and duty payment.13. Dismissal of Revenue's appeal by the Tribunal based on precedent cases and High Court decisions.14. Upholding of the Commissioner(Appeals) order by the Appellate Tribunal.Analysis:The case involved an appeal by the Revenue against the Commissioner(Appeals) order allowing the appeal of the assessee, a manufacturer of hot re-rolled products, who allegedly cleared excisable goods without paying duty and suppressed manufacturing on a job work basis. The Joint Commissioner confirmed the duty demand, interest, and penalty under Section 11AC, leading to the assessee appealing before the Commissioner(Appeals). The Commissioner(Appeals) allowed the appeal, stating that duty payment was not required for goods manufactured on a job work basis under Section 3A of the Central Excise Act, 1944. The Revenue challenged this decision, leading to the present appeal.The Appellate Tribunal noted that the Commissioner(Appeals) based the decision on Tribunal and High Court judgments. The Commissioner(Appeals) cited cases where the compounded levy scheme excluded general provisions of the Central Excise Act, leading to no duty liability for goods manufactured on a job work basis. The High Court also dismissed Revenue appeals, emphasizing that duty payment based on annual capacity determination precluded further duty demands for job work activities. The Tribunal, following precedent, upheld the Commissioner(Appeals) decision, dismissing the Revenue's appeal.Ultimately, the Appellate Tribunal found no infirmity in the Commissioner(Appeals) order, upholding it and dismissing the Revenue's appeal. The decision rested on the interpretation of Section 3A of the Central Excise Act, compounded levy scheme provisions, and the exclusion of general excise duty provisions for job work manufacturing. The Tribunal's decision aligned with previous judgments emphasizing the annual capacity determination and duty payment as sufficient, precluding additional duty demands for job work activities.