TaxTMI 
TaxTMI 
2010 (1) TMI 421
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.... Customs duty as well as without payment of Customs duty under various schemes such as advance authorisation scheme/advance licencing scheme/DEEC scheme and Target Plus scheme. While co-relating the raw material imported under advance authorisation scheme and target plus scheme with the inputs consumed for manufacture of final products, it was noticed that the input Beta Napthol was cleared as such without subjecting it to any further process after import by the Appellant. The Appellant had cleared the imported Beta Napthol under the cover of job work challans. Similarly, Beta Napthol procured from the domestic market had been cleared under the cover of job work challans. However, there was no entry in the records showing that the processed goods were received back after job work. During the investigation, it appeared that the imported materials cleared by the Appellant to the manufacturers; M/s Bodal Chemicals Ltd., M/s Shivam Chemicals, Vapi and M/s Shree Chemicals, Vapi were not received back after processing under the cover of the job work challans, but finished goods were received under the cover of invoices after payment of Central Excise duty and VAT by the said manufacturer....
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.... Ahmedabad I on 3rd November, 2009 and in spite of this, the Assistant Commissioner proceeded to adjust the penalty amount from the rebate claimed which was found admissible to them. He also submitted that in this case, the entire amount of duty had been deposited by the Appellant and in the normal course, the Appellant would have got an unconditional stay against the recovery of penalty having regard to the facts and circumstances of the case. 6. The Tribunal wanted to take up the matter relating to stay on the same day in view of special circumstances in this case. However, the learned SDR submitted that he was not prepared and therefore, the matter was fixed for hearing on 6th January, 2010. On 6th January, 2010, when the matter was taken up for hearing, the learned Advocate on behalf of the Appellant submitted that stay may be granted against recovery of penalty. He also submitted that if the stay is granted, the department will have to refund the penalty amount which was adjusted from the rebate claim. 7. The learned SDR, on the other hand, submitted that normally, when stay petitions are filed by the department, where the Order of the Tribunal resulting in refund has alre....
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.... for job work. They had correctly followed the provisions of Rule 4(5) of CENVAT Credit Rules, 2004. According to him, Rule only requires that if the goods are not received back within 180 days, the credit is required to be reversed. The Rule does not prescribe any proforma. He submits that they had used proforma which has been prescribed earlier for job work under Rule 57F2 of CENVAT Credit Rules (erstwhile Central Excise Rules, 1944). He also submits that the job worker on receipt of the input, also added some additional material, and chose to pay duty on final product. He submits that since the job worker paid duty again, the Appellant had no alternative but to take credit of the same in their account since otherwise they had to pay the excess duty on the intermediate goods and has to forgo the benefit of CENVAT Credit on the input supplied by them. Further, credit taken is nothing but what is paid. In any case, similar cases were considered in both decisions cited by him by the Apex Court and therefore, the appeal may be allowed. 9. On the other hand, learned SDR submits that it is their case that the goods were not sent for job work at all. Job workers had paid duty on manuf....
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....urer of the final product on the inputs supplied by it to the manufacturer of the intermediate products which credit is reversed ultimately when the final product is removed from such manufacturers' factory. As far as the Appellant, (the intermediate purchaser) is concerned, it is not liable to pay duty on the inputs supplied by TELCO since it had not taken the credit for the MODVAT in respect of inputs. It is submitted that it cannot be called upon to pay the duty in respect of those inputs nor can the value of the inputs be added to the excisable value of the assemblies. 6. We are of the view that the submission of the Appellant is correct. The Tribunal appears to have been confused between the manufacture of the final product, namely, excavators and the manufacture of the intermediate product, namely, the floor plate assemblies. The scheme of MODVAT permits the person who clears the ultimate final product to take the benefit of the MODVAT scheme at the time of clearance of such final product. The manufacturer of the final product, in this case TELCO would therefore, be entitled not only to adjust the credit on the inputs supplied by it to the intermediate purchaser such as the....