TaxTMI 
TaxTMI 
2014 (9) TMI 717
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....involved on mould and dies and clear them to the consignee for manufacture of parts of washing machines without payment of duty. The consignee sends back the duty paid parts manufactured to the assessee, which already includes the amortized value of the moulds and dies, involved for the manufacture. Thus, there is double Modvat benefit to the assessee, which is violative of CENVAT/MODVAT provisions. Is it correct in law to allow double Modvat benefits to the assessee?" C.M.A.No.2396 of 2005: (i) Whether the Tribunal's finding that it is not necessary for the purpose of sub Rule (8) of Rule 57S of Central Excise Rules, 1944 that only those person will be termed as job worker to whom the raw materials are supplied to, is correct in law? (ii) The assessee avails credit of duty involved on mould and dies and clear them to the consignee for manufacture of parts of washing machines without payment of duty. The consignee sends back the duty paid parts manufactured to the assessee, which already includes the amortized value of the moulds and dies, involved for the manufacture. Thus, there is double Modvat benefit to the assesee, which is violative of CENVAT/MODVAT provisions. Is it ....
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....s and dies without payment of duty and sent to the job workers for the purpose of production of goods on their behalf and in accordance with the specifications. The Department was of the view that the job workers/consignees were buying the raw materials on their own and manufactured the parts of the washing machine with the help of the moulds and dies supplied by the assessee and therefore, they are the principal manufacturer and the assessee also is a principal manufacturer. The removal of moulds and dies from one principal manufacturer to another principal manufacturer should be done only after reversing the credit taken on the moulds and dies by the assessee. In the present case, this event had not happened and therefore there is a violation of the provisions of the erstwhile Modvat Rules. Accordingly, show cause notice was issued to the assessee in respect of four different periods. The assessee submitted their objection to such demand contending that under Rule 57S(8) of Modvat Credit Rules, (hereinafter referred to as 'Rules') proper permission has been obtained from the jurisdiction Commissioner and there is no need for reversal of credit availed in respect of moulds....
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.... job worker for the purpose of production of goods on his behalf and according to his specifications. Sub-rule (8) starts with the words "Notwithstanding anything contained in sub-rule (1)" and as such is a non-obstante clause. This rule clearly empowers the appellants to remove the moulds and dies without payment of duty to the premises of job worker for the purpose of production of goods on their behalf and according to their specifications. The Tribunal has already held in a number of decisions starting from M/s.Monica Electronics that it is not necessary for the purpose of sub-rule (8) of Rule 57S that only those persons will be termed as 'job workers' whom the raw-materials are supplied to. Thus, following the ratio of these decisions, we set aside the impugned order and allow all the appeals." 5. Aggrieved by the order of the Tribunal, the Revenue has filed the present Civil Miscellaneous Appeals. 6. Learned Standing Counsel appearing for the Revenue submits the provisions under Rule 57S(8) of the Rules would not apply to the case of the assessee, as the raw materials were not supplied by the assessee to the job worker and the job worker purchased the raw materials ....
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....orker, will not be applicable for the interpretation of sub rule 8 of Rule 57 S of Central Excise Rules, 1944?" 10. Firstly, whether the decision relied on by the Original Authority in the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365 is applicable to the facts of the present case has to be seen. 11. In the case of Prestige Engineering (India) Ltd. vs Collector Of Central Excise, Meerut reported in 1994 (73) ELT 365, the question raised was as to the true meaning and purport of Notification No.119/75-C.E., dated April 30, 1975 issued by the Central Government under Rule 8(1) of the Central Excise Rules, 1944. The said Notification reads as follows: "NOTIFICATION Exemption to goods produced on the job work basis :- 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 falling under Item No. 68, of the First Schedule to the Central Excise and Salt Act, 1944 (1 of 1944), manufactured in a factory as a job work from so much of the duty of excise leviable thereon as is excess of the duty calculated on the basis of the amount charged ....
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....e article has undergone the intended manufacturing process, on charging only for the job work done by him." 13. The Supreme Court also laid emphasis on the notification and the reason as to why such notification was issued in paragraph 18 of the judgment, which reads as follows: "It must be remembered that the Notification was issued simultaneously with the introduction of Tariff Item 68 in Schedule-I to the Act and was intended to help those factories undertaking job works, who were charging their customers only for the work done by them. In their hands, the value of the article would be the value of the job-work done by them - and not the total value of the article which would have been the case but for the Notification. According to the restricted view contended for by the Revenue, a tailoring factory stitching clothes out of the cloth supplied or a factory preparing shoes out of material supplied by the customer, in the illustrations given hereinabove, would not qualify for the benefit of the Notification." 14. On facts, the Supreme Court came to the conclusion that the rings and adapters were not supplied by M/s.Modipon. Except the pipes, all other items which go into the m....
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.... same, from the factory for home consumption or for export, on payment of appropriate duty of excise leviable thereon or for export under bond, as if such capital goods have been manufactured in the said factory." This provision is applicable only for the removal of duty paid capital goods. 18. Clause 8 of Rule 57S provides, "Notwithstanding anything contained in sub-rule (1), a manufacturer may, with the permission of the Commissioner and subject to such terms and conditions and limitations as he may impose, remove the moulds and dies, without payment of duty, to a job-worker for the purpose of production of goods on his behalf and according to his specifications." 19. We find that the above-said provision makes it clear that the removal of moulds and dies without payment of duty is in relation to only moulds and dies and not with respect of any other capital goods. It does not impose any condition that the raw materials also should be supplied by the assessee along with the moulds and dies. So long as the permission is granted by the Commissioner for removal of moulds and dies without payment of duty to the job worker, the question of deeming it as an improper clearance does ....
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....r' is supplied with raw material by the manufacturer and the job worker clears the manufactured goods from his factory after utilising the raw materials supplied by the manufacturer. The intention is to exempt the 'job worker' of duty liability as a manufacturer. In the facts of the present case, the moulds which are capital goods, they are not materials which get consumed in the process of manufacture by the job worker. The scheme of Rule 57S and Sub-rules (8) to (10) thereof does not therefore appear to be compatible with the definition of 'job worker' in the said Notifications. We therefore, find that there is force in the contention of the ld. counsel that any interpretation of 'job worker' in Sub-rules (8) to (10) of Rule 57S as having the same meaning it has in the Exemption Notifications will distort the said provisions and make it unworkable. We also find that the decisions relied on by the Commissioner do not deal with the question of applicability of definition of 'job worker' in other Notifications to provisions of Rule 57S(8)." 21. We find the distinction made by the Tribunal, on facts, as against the decision in the case of Prestige....
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....T 130 (SC); Birla Corporation Ltd. v. Commissioner of Central Excise - 2005 (186) ELT 266 (SC); and Jayaswals Neco Ltd. v. Commissioner of Central Excise, Nagpur - 2006 (195) ELT 142 (SC). It has been held in all these cases that if no appeal is filed against an earlier order or the earlier appeal involving the identical issue was not pressed by the Revenue, the Revenue is not entitled to press the other appeals involving the same question. In Birla Corporation Ltd. (supra), this Court observed as follows: "In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was, therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. [2001 (130) E.L.T. 193] cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary." 23. In the present case, we f....