2017 (6) TMI 209

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.... appellant had been clearing chenille yarn without payment of duty on job work in terms of Notification No. 214/86 dt. 25.03.1986 to M/s Virender Processors P. Ltd., Tarapur, Thane from whom they were receiving viscose and cotton yarn on challans. Chenille yarn was finding use in the manufacture of fabric falling under chapter 5801, 5406 & 5514 to which the benefit of Notification No. 214/86 was not available. Therefore, it was imputed that the benefit of Notification No. 214/86 was not available to the appellant and they were required to pay duty on the chenille yarn supplied without payment of duty on job work to M/s Virender Processors P. Ltd., Tarapur, Thane. Accordingly, show cause notice was issued to the appellant for recovery of dut....

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....on ble Supreme Court in Commissioner Vs. Dhana Singh Synthetics Pvt. Ltd. 2016 (337) ELT A140(S.C.). He also produced the copy of the Board circular No.306/22/97-CX dt.20.3.1997 and adjudication order passed by the Additional Commission, Ludhiana vide File No. V(56)15Adj./Commr/47/2003/1457 dt.27.01.2004 dropping identical demand for subsequent period. 6. Heard the parties and perused the records. 7. We find that the demand in this case was raised on the ground that the benefit of Notification No. 214/86 was not available to the appellant and therefore, the appellant was required to pay the duty on chenille yarns manufactured and supplied on job work basis to the principal manufacturer. The contention of the appellant is that they rec....

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....ured by them on job work basis. It has been alleged that the fabrics manufactured by the appellant on job work basis during the relevant period were not exempted by Notification No. 214/86-C.E., dated 25-3-1986. The adjudicating authority dropped the proceeding initiated under show cause notice dated 25-10-2004. Revenue filed appeal before the Commissioner (Appeals). By the impugned Order, Commissioner (Appeals) allowed the appeal filed by the Revenue and set aside the adjudication Order. Hence, the appellant filed this appeal before the Tribunal" In this case, the Tribunal had held as below:- "3. The Commissioner (Appeals) observed that the benefit of Notification No. 214/86-C.E., dated 25-3-1986 as amended was not available to....

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....ecision was upheld by the Hon ble Supreme Court as reported in 2002 (146) E.L.T. A309. We find that Rule 57F(4) of the erstwhile Rules corresponding to Rule 57F(4)(5)(a) of the Cenvat Credit Rules, 2002, permits the manufacturer to clear the goods to job worker without payment of duty for processing. There is no dispute that the job work materials were used in manufacture of finished goods by the principal manufacturer, who cleared the goods on payment of duty. Thus, it is the case of revenue neutral in so far as the payment of duty by the job worker will enable the principal manufacturer to avail Cenvat credit. Hence, we find that the order passed by the adjudicating authority is legal and proper." The appeal against the above order was....