2018 (4) TMI 219

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....ected the appeal of the appellant. 2. Briefly the facts of the present case are that the appellants are job workers for M/S. L&T Komatsu Ltd. and receives certain materials free of cost under delivery challan which they use for the process and clear the goods to L&T on payment of duty. On verification, it was found by the Internal Audit party of the Department that the appellants are not paying Central Excise duty on the value of free supplied items, while clearing the semi-finished goods to their principal L&T. On this allegation, a show-cause notice was issued and after following the due process, the Additional Commissioner confirmed the demand of duty on the findings that as per Rule 6 of Central Excise Valuation (Determination of Pri....

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....7F (4), then the liability to be discharged on the processed goods / manufactured by the job worker in law rest upon the customer/supplier of the raw material. He further submitted that this issue has been considered by the Tribunal in various cases and also the apex court in the case of International Auto Ltd. vs. CCE, Bihar [2005(183) ELT 239 (SC)] wherein it  has been held by the apex court that intermediate product manufacturer is not liable to pay duty on inputs supplied by final product manufacturer nor value of such inputs be added to the excisable value of intermediate product. He further submitted that the Commissioner(Appeals) has wrongly held that the transaction between the appellant and the supplier of the material was a s....