2012 (10) TMI 37

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....by them and clearing finished goods on payment of duty (ii)    They get raw material from some other Central Excise assessees, manufacture goods and clear it on payment of duty (iii)   They get raw material under job-work challan from other Central Excise Assessee manufacture finished products and clear the goods under exemption Notification 214/86-C.E. That is to say these goods are either used in the further manufacture of the supplier or the supplier is clearing the goods on payment of duty. 2. The present dispute is about activity at (ii) and (iii) above. 3. The Revenue noticed that the Respondent had an agreement with suppliers of raw material at (ii) and (iii) above to give back finished ....

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.... the excess buring loss and supply 90% by weight of raw materials supplied to suppliers as mentioned in category (ii) in Para 1 6,74,994 B Duty on finished goods manufactured using raw material procured by the assessee to make good the excess buring loss and supply 90% by weight of raw materials supplied to suppliers as mentioned in category (iii) in Para 1 1,45,635 C Credit taken on invoices in the name of others 49,776 7. In adjudication proceedings duty amounting to Rs. 8,31,963 was demanded along with interest on components A and B in TABLE-II. Penalty equal to the said amount was imposed under Section 11AC of the Act. Duty amounting to Rs. 49,777 on component C in TABLE-II of the demand also was confirmed. ....

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.... point that the goods relating component A in TABLE-II of the demand are cleared on payment of duty as held by the Commissioner (Appeals). Revenue has a new case that such goods were cleared on the basis of value arrived at by cost construction method as laid down the case of Ujagar Prints [1988 (38) E.L.T. 535 (S.C.)]. But the goods are actually manufactured and sold and so value should have been arrived as per Section 4(a) of the Act. This is an altogether new issue being brought up in second Appeal for the first time. 11. Revenue also has a case that in respect of component B in TABLE-II clearances were not eligible for exemption under Notification 214/86 because the impugned goods were not made on job work basis from raw materia....