2014 (8) TMI 285

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....s of Rs. 6225956/- under Rule 14 of Cenvat Credit Rules 2004 read with proviso to Section 11A (1) of Central Excise Act 1944 and ordered its recovery alongwith interest. Penalty of Rs. 6225956/- under Rule 15 of Cenvat Credit Rules read with Section 11 AC of Central Excise Act 1944 was also imposed. This order-in-original was issued in respect of the show cause notice dated 06.03.2012. This order is in respect of the Appellant's stay application. 2. Briefly stated, the main facts of the case are that during the period 27.08.2007 to 31.05.2008, the Appellant took credit of duty paid on the raw material i.e. MS Rounds, MS Tubes, Pipes, MS Bars/Rods and sent them to the job workers for carrying out the process of cutting, straighteni....

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....ling under Chapter heading 7308/7318 amounts to manufacture. Further, the process of threading of MS Pipes (Tariff head 7306) and ERW Pipes/Tubes (Tariff head 730690110) amounts to manufacture since tariff heading changes to 7308/7318 and the process of forging of MS Round (Tariff head 7214) into Ledger Blade and Jack Nut (Tariff head 7326) also amounts to manufacture...................."     (ii) In CCE Vs. Rana NHK Steering 2007 (218) ELT 354 (P & H), the Hon'ble P&H High Court has held that once assessee paid duty, he naturally becomes entitled to avail credit.     (iii) In Brakes India Ltd. CCE 2007 (214) ELT 380 (Tri-Chennai) the Hon'ble Tribunal has held that packing, testing of goods receiv....

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....d the submissions made by both sides. Prima facie, it is seen that the assessee was paying duty on the final product cleared by them. The show cause notice or the Order- in-Original doesn't question the applicability of exemption notification no. 214/86-CE in respect of the job workers. If the contention of the adjudicating authority that the Appellant themselves did not carry out any processes amounting to manufacture (and hence no Cenvat credit can be allowed to them on the raw material) then the Appellant would not be liable to pay duty either and surprisingly the show cause notice seems to admit as much as can be seen from para 14 of in show cause notice quoted below;-     "14. The notice was taking credit fraudule....

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..... 9. Notification No. 214/86 reads as under:-     "Specified goods manufactured in a factory as a job work and used in the manufacture of final products.     In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods specified in column (2) of the Table hereto annexed (hereinafter referred to as the said goods) manufactured in a factory as a job work and used in or in relation to the manufacture of final products (on which duty of excise is leviable whether in whole or in part) specified in column (3) of the said Table, from the whole of the duty of excise leviable thereon, which is specified in the Schedule to the Centra....