TaxTMI 
TaxTMI 
2017 (12) TMI 602
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....lied raw materials, copper rods, to the appellant under job work challans. The appellants undertook the job work and cleared back copper wires. The principal manufacturer was located at Haridwar availing area based exemption in terms of Notification No.49-50/2003-CE dated 10.06.2003. The Revenue initiated action against the appellant for irregular availing of exemption under Notification No.214/86-CE dated 25.03.1988 on the ground that no excise duty was paid on the final products manufactured out of job worked goods by the principal manufacturer. The case against the appellant was adjudicated resulting in the impugned order. The original authority held that the appellants are liable to pay Central Excise duty of Rs. 2,37,08,329/-. Penalty ....
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....ppellant under Rule 26(1) of the Central Excise Rules, 2002 is not sustainable. The second appellant was appointed as Director in the appellant company only on 29.10.2012. There is no question of him dealing with goods in question. Accordingly, the penalty on the second appellant is legally not sustainable. 3. Ld. AR reiterated the findings of the lower authority. He submitted that the appellants are not eligible for exemption under Notification No.214/86 as one of the main conditions is to the effect that the final products should have suffered excise duty in whole or part. Since in the present case the final product did not suffer any duty as the principal manufacturer availed exemption under Notification No.50/2003, there is no question....
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....dit arises only after payment of excise duty. He also relied on the provisions of Rule 9(1)(b) of Cenvat Credit Rules, 2004. We note that the findings recorded by the original authority are not legally sustainable. When duty liability arises on the final product it is necessary to examine the claim of the appellant for admissibility of cenvat credit on duty paid inputs/input services. In this connection, we refer to the decision of the Hon'ble Supreme Court in NTB International Pvt. Ltd. Vs. CCE, Thane - 2015 (319) ELT 545 (SC) and in CCE, Jaipur Vs. Mahavir Aluminium Ltd. - 2007 (212) ELT 3 (SC). We also note that the reference made to Rule 9 by the original authority is not relevant to the facts of the present case. Here, the appellant is....
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.... of Notification No.214/86. It is clear that they had the contractual arrangement with the principal manufacturer who was availing area based exemption under Notification No.40/2003. It is the responsibility of the appellant to fulfil the conditions of the exemption Notification No.214/86. It cannot be argued that the non payment of excise duty on the final product is not in the knowledge of the appellant. The conditions of the notification is very clear, without any ambiguity. When the appellant claimed the exemption and informed the department about undertaking job work it is necessary for them to ensure that all the conditions of the notification are fulfilled. It is clear that the final product manufactured out of job worked goods did n....