2010 (8) TMI 363

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....t for adjournment. The respondent's counter to the Revenue's appeal, styled as "cross-objections", is available on record. We have examined the records. In the relevant show-cause notice, which was issued for the period 1995-96 to Feb. 2000, the respondent was asked to pay duty of Rs. 34,427/- on the amortized value of dies/moulds, which were supplied by the customers and used for manufacture of final products on job work basis and another amount of duty (Rs. 44,803/-) on 4762.11 kg of scrap which was generated in the course of the job work, totalling to Rs. 79,230/-. The show-cause notice invoked the proviso to sub-section (1) of Section 11A of the Central Excise Act for recovery of the above duty from the respondent on the ground that the....

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....to the appellant was in gross violation of the provisions of Rule 57F(5) of the Central Excise Rules. As regards non-payment of appropriate duty on the finished goods, the appellant submits that the amortized value of the dies/moulds supplied free of cost by the customer was not included in the assessable value of the job-worked goods supplied to the customer and that it was only after detection of this offence by the department that the respondent paid duty on the amortized value of the capital goods. The non-inclusion of the amortized value of dies/moulds was also not disclosed to the department and therefore, the proviso to Section 11A(1) of the Act was rightly invoked by the adjudicating authority. According to the appellant, the origin....

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....demanded duty of Rs. 79,230/- only. Therefore, in the matter of demanding the differential amount (Rs. 83,591/- - Rs. 79,230/-), the adjudicating authority had travelled beyond the scope of the show-cause notice. The observation made to this effect by the lower appellate authority is factually correct. The question now arising for consideration pertains to penalties. The adjudicating authority imposed a penalty of Rs. 62,286/- on the respondent under Sec. 11AC and a penalty of Rs. 21,305/- on them under Rule 173Q. These two penalties add up to Rs. 83,591/-. It appears, Sec. 11AC was invoked for the period from 28-9-1996 (the date on which the provision came into force) only and Rule 173Q was pressed into service for imposing a penalty on th....

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....viso to Section 11A(1) of the Act. 4. As regards the plea raised by the respondent that they were entitled to avail SSI benefit in respect of the scrap in question, we have not found force in this plea. Where the respondent independently manufactured final products on their own and cleared the same, it might be open to them to claim SSI benefit by satisfying the relevant conditions of the SSI Notification. This benefit cannot be claimed in respect of any final product or resultant scrap arising under job work, to which the provisions of Rule 57F(3) to Rule 57F(5) would apply in so far as the period of dispute is concerned. The respondent was not entitled to claim the benefit of 'Nil' rate of duty in respect of the scrap which was ge....