1998 (9) TMI 263 - AT - Central Excise

Appellant wins excise duty exemption case, distinguishing subcontractors from job workers.

TATA ELECTRONIC DEVPT. SERVICES Versus COMMR. OF C. EX., BANGALORE

TATA ELECTRONIC DEVPT. SERVICES Versus COMMR. OF C. EX., BANGALORE - 1999 (107) E.L.T. 86 (Tribunal) Issues:1. Interpretation of Notification No. 184/86 for exemption eligibility.2. Determination of whether the appellant qualifies as a job worker under the notification.Analysis:1. The case involved M/s. Bharat Electronics Ltd. (BEL) subcontracting the manufacture of 'Trishul Launcher Assembly' to the appellant for a Guidance system supplied to the Ministry of Defence. The appellant paid duty under protest and filed refund claims citing exemption Notification No. 184/86. The issue was whether the goods qualified for the exemption under the notification.2. Notification No. 184/86 exempted goods manufactured by specific units for supply to the Ministry of Defence from excise duty. The appellant argued that despite not being one of the listed units in the notification, they should still qualify for exemption as a subcontractor. The Central Board of Excise & Customs (CBEC) had issued clarifications allowing subcontractors to avail the exemption if certain conditions were met.3. The Tribunal noted that the appellant, as a subcontractor, manufactured excisable goods for BEL, enabling the further production of the Guidance system for the Ministry of Defence. The appellant did not clear goods directly to the Ministry of Defence but to BEL for further processing. As the appellant did not meet the criteria of a job worker, they were entitled to the benefit of the exemption under the CBEC clarification.4. The Tribunal emphasized that the appellant's role as a subcontractor, not a job worker, aligned with the conditions specified in the CBEC clarification. BEL confirmed that no duty was collected from the appellant for the supply of Launcher Assembly. Consequently, the Tribunal set aside the previous orders, allowing the refund claims and directing the refund of duty paid by the appellant on the Launcher Assembly.5. In conclusion, the Tribunal ruled in favor of the appellant, recognizing their eligibility for the exemption under Notification No. 184/86 as per the CBEC clarification. The judgment highlighted the distinction between subcontractors and job workers in determining eligibility for excise duty exemptions, ultimately granting the appellant's refund claims.