2024 (6) TMI 1398 - AT - Central Excise

Tribunal Rules Principal Manufacturer Not Liable for Duty on Waste at Job Worker's Factory per CENVAT Rules.

M/s. Greaves Cotton Ltd. Versus Commissioner of GST & Central Excise Chennai

The Appellate Tribunal CESTAT Chennai set aside the impugned orders, allowing the appeals with consequential relief. It held that the principal ... Liability of appellant to pay Central Excise Duty - appellant is the principal manufacturer and who has sent their raw materials to their job workers for conversion in terms of N/N. 214/86 -CE dated 25.03.1986 - HELD THAT:- The said issue stands decided by the Tribunal in the appellant’s own case in M/S. GREAVES COTTON LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE CHENNAI [2024 (5) TMI 1470 - CESTAT CHENNAI] has held that 'the appellant is not the manufacturer of the waste and scrap and therefore, there is no liability on the appellant to pay the duty on the waste and scrap manufactured at the job worker’s end. Further, the provision of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 nowhere states that the waste and scrap generated at the job worker’s end makes the principal manufacturer liable to payment of duty on such waste and scrap.' The demand do not sustain - impugned order set aside - appeal allowed. Issues:Whether the principal manufacturer is liable to pay duty on waste and scrap generated at the job worker's factory and cleared without payment of duty.Analysis:The Appellate Tribunal CESTAT Chennai, comprising HON'BLE MS. SULEKHA BEEVI.C.S., MEMBER (JUDICIAL) and HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL), heard the appeal where the issue was whether the principal manufacturer, who sent raw materials to job workers for conversion under Notification No. 214/86 -CE, is required to pay duty on waste and scrap cleared by the job worker without duty payment for specific periods. The Tribunal had previously decided this issue in favor of the appellant in various orders for different periods. The Tribunal referred to previous decisions in the appellant's case and concluded that the demand for duty on waste and scrap cannot be sustained.The Tribunal reiterated that the issue of duty payment on waste and scrap generated during job work, cleared without duty payment by the job worker, had been settled in the appellant's favor in earlier orders. The Tribunal highlighted that Rule 4(5)(a) of the CENVAT Credit Rules, 2004 does not impose liability on the principal manufacturer for waste and scrap generated at the job worker's end. The Tribunal cited previous orders and legal precedents to support its decision, emphasizing that the duty liability on waste and scrap is not applicable to the principal manufacturer as per the relevant rules.The Tribunal examined the impugned orders and found that they invoked Rule 4(5)(a) of the CENVAT Credit Rules, 2004, but failed to establish the principal manufacturer's liability for duty on waste and scrap. The Tribunal noted that Rule 4(5)(a) of the CENVAT Credit Rules, 2004 did not impose such liability and had been interpreted similarly in previous orders concerning the appellant. Based on the settled legal position and previous decisions, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief as per the law.In conclusion, the Tribunal held that the impugned orders were set aside, and the appeals were allowed with any consequential reliefs. The decision was dictated and pronounced in open court, confirming that the principal manufacturer was not liable to pay duty on waste and scrap generated at the job worker's factory and cleared without payment of duty.