TaxTMI 
TaxTMI 
2020 (1) TMI 801
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....ies of motor vehicles. The appellant is also undertaking job work under Central Excise Act, 1944 ('Act' for short) and Rules made there under. 3. It was observed by the department, that the appellant was availing exemption of Notification No. 214/1986-CE dated 25.03.1986 for job work on 'blank' supplied by M/s. VE Commercial Vehicles, (hereinafter referred to M/s VECV) Pithampur. It was also observed by the department that the appellant was also realizing job charges separately for the activities of forming, of blank. The appellant cleared the processed blank to their supplier manufacture without payment of duty. But the appellant availed the Cenvat Credit of duty paid on paints used for job work activities as per the Cenvat Credit Rules, 2004. The department, therefore, alleged that as the appellant was not paying Central Excise duty for the said job work, and thus they have illegally availed the Cenvat Credit of Excise duty paid on paints which were used for job work activities as the cost of the paints have separately mentioned in the invoice. The department issued show cause notice dated 23.12.2015 to the appellant which was adjudicated by the original authority and was also....
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....da 2011 (263) E.L.T. 81 (Tri.) Delhi, Commissioner of Central Excise, Ludhiana Vs. Jainsons Wool Coombers Ltd. 2012 (26) S.T.R. 488 and Hon'ble Cestat, Mumbai, and Final Order No. A/201/11/SMB/C-IV dated 01.06.2011 in the case of Aurangabad Auto Engineering Pvt. Ltd., Vs. Commissioner of Central Excise, Aurangabad. 6. In light of above submission made by the learned Advocate, it was argued that issue stand settled in favor of the appellant and therefore accordingly appeal is prayed to be allowed. 7. We have also heard Learned Departmental representative, who supported the findings of the Adjudicating Authority. 8. Heard the parties and perused the case records. 9. The issue that is to be decided in this case is as to whether the appellant is entitled to avail the Cenvat Credit on the paints used by the appellant while doing the job work under Notifications No. 214/81, when the cost of paints have been separately shown in the invoices and not recovered from the manufacture. We find that issue is not more res-integra view of the various decisions referred and relied by the learned Advocate. We find that the similar issue has come up for considering before larger bench of ....
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.... 3. We are also in agreement with the appellant's contention that Rule 57C debars taking of credit in respect of the inputs used in the manufacture of the final product, if final product is exempted from the whole of duty of excise leviable thereon or chargeable to nil rate of duty. As such, to attract the provisions of Rule 57C, two situations in respect of the final product should be satisfied. Either the final product should be exempted, which situation can arise only when there is an exemption notification issued under Section 5A of the Central Excise Act or the final product is chargeable to nil rate of duty. Expression chargeable to nil rate of duty or exempted from whole of duty was considered by the Tribunal in the case of Orissa Synthetics Ltd. v. Collector of Central Ex. [1995 (77) E.L.T. 350 (Tri.)] and after taking note of the Ministries clarifications issued vide Circular No. 10/75/CX. 6, it was held that clearance under goods under provision of 191BB for export without payment of duty would not get covered by the above expression. Reference was made to the advice received from the Ministry of Law dealt in the paragraph of 9 in the said decision. It was opined i....
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....stence. Thus in cases where intermediate product may also come into existence. Thus in cases where intermediate product comes into existence, even though no duty has been chargeable to Nil rate of duty, credit would still be allowed so long as duty is paid on the final product. 9. In cases of manufacturers like the Appellants the final product is the tractor. The intermediate product would be parts which are manufactured for being used in the tractor. In such a case the parts would not be the final product. Thus Rule 57C would have no application. The mere fact that the parts are cleared from one factory of the Appellants to another factory of the Appellants would not disentitle the Appellant from claiming benefit of Notification No. 217/86-C.E., dated 2nd April, 1986. As stated above, the Notification itself clarifies that the inputs can be used within the factory of production or in any other factory of the same manufacturer." By applying the ratio of the above decision, it becomes clear that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final produc....