2018 (1) TMI 16

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.... workers without payment of duty on the premise that these dies were used by them captively for manufacture of their final products and availed exemption under Notification No.67/95-CE dated 16.3.1995. During the course of investigation, it was found that as these dies manufactured by the appellant are required to be cleared on payment of duty as the same have not used in their factory but cleared to the job workers without payment of duty. The show cause notice dated 17.09.2007 was issued to the appellant for demand of duty by invoking the extended period of limitation on the clearance of dies to the job workers during the period 2002 to March, 2007. The matter was adjudicated, the demand of duty along with interest was confirmed, penalty ....

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....(5) (b) of the Rules are applicable only in a situation where the Cenvat credit has been taken by the appellant. Admittedly, as no duty has been paid by the appellant and no credit has been taken by the appellant, therefore, the provisions of Rule 4(5) (b) are not applicable. 5. Heard the parties sand considered the submissions. 6. We find that in this case, it is admitted fact that these dies have been manufactured by the appellant in their factory and sent to the job worker for further manufacturing intermediate goods. The benefit of Notification No.67/95-CE is available to the assessee who manufactures goods which were captivley consumed in the factory of production. Admittedly, the dies have not been used captively in the factory of t....

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.... factory itself has moved to Noida and since the moulds in question continues to be used within the factory it cannot be said that the moulds have been cleared out of the factory. The fact also remains that in case duty is paid on the moulds on its transfer to Noida, such duty will be available as cenvat credit to the recipient factory. Inasmuch as the original and the destination factory belong to the same manufacturer and in fact since the former merged with the later, the whole exercise will lead to the revenue neutral situation and useful purpose will be served by charging duty for such clearances. Such a demand therefore needs to be set aside." 8. Further, we find in the case of SMT Machine (India) Limited (supra), Hon'ble Punjab ....

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....ent supplied to SEZ units/developers is clearly revenue neutral as the appellants could have claimed refund or availed Cenvat credit. In this regard, as rightly held by the Tribunal in the case of Reliance (supra) demand of duty on intermediate products will only increase scriptory work with no benefit to the revenue. Relevant para is extracted below : The Tribunal in 6. the case of CCE, Surat v. Reliance Industries Ltd. - [2004 (167) E.L.T. 118 (Tri. - Mumbai)], while dealing with an identical captive consumption Notification No.217/85-C.E. has followed the earlier decision of the Tribunal in the case of M/s. Bajaj Tempo Ltd. v. CCE - [1994 (69) E.L.T. 122] laying down that the object of the captive consumption notifications is to avoid u....