2015 (11) TMI 38

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....3, the appellants received fabrics for processing from two different parties for job work, accompanied with challans (i.e.. Annexure II) issued under Rule 57F(4) of the erstwhile Central Excise Rules, 1944. Rule 57F(4) is corresponding to provision of Rule 4(5)(a) of Cenvat Credit Rules, 2002. The appellants cleared the goods after processing to the supplier of the material under the cover of the Central Excise challans. A show cause notice dtd 25.10.2004 was issued to the appellant proposing demand of Central Excise duty amounting to Rs. 34,12,152/- on the ground that they did not pay the Central Excise duty on the clearance of fabrics manufactured by them on job work basis. It has been alleged that the fabrics manufactured by the appellan....

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....ed goods for job work and after completion of job work was permitted to remove the processed/semi-processed without payment of duty under Annexure II Challan to the principal manufacturer. If the old Rule 57F(6) of Central Excise Rules, 1944, there was a provision to debit an amount equal to 10% of the value of inputs removed to job-worker. But the same was done away subsequently and no such condition is stipulated in new Cenvat Credit Rules The reversal of Credit by the manufacturer is envisaged under the new Rule 4(5)(a) only when the inputs/semi-finished goods so sent to the job worker are not received back within 180b days by the manufacturer. Moreover, the manufacturer is allowed to take the Cenvat Credit again when the inputs/Capital ....

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....leared on payment of duty by principal manufacturer, on job work basis not hit by provisions of Rule 57F of erstwhile Rule. In the case of M. Text & DK Processors Pvt Ltd Vs CCE, Jaipur - 2001 (136) ELT 73 (Tri.Del.) the Tribunal held that partially processed fabrics returned by the job worker to the principal manufacturer after heat setting and stentering under Rule 57F(4) not required to pay duty in the hands of job worker even if heat setting and stentering amount to manufacture in terms of Chapter Note 4 of Chapter 55 of Central Excise Tariff Act 1985. The said decision was upheld by the Hon'ble Supreme Court as reported in 2002(146) ELT.A309  . We find that Rule 57F(4) of the erstwhile Rule corresponding to Rule 4 (5)(a) of th....