TaxTMI 
TaxTMI 
2020 (6) TMI 752
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....in and in relation to manufacture of the final product by the main manufacturer subject to some conditions indicated therein. It is the case of the appellant that they have also operated under Rule 4(5) of CCR, 2004. The aforesaid notification reads as under : "Notification No. 214/86-C.E., dated 25-3-1986 Exemption to specified items if manufactured in a factory as a job work and used in the manufacture of final products In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), (hereinafter referred to as Special Importance Act), the Central Government, being satisfied that it is necessary in the public interest so to do hereby exempts goods specified in column (1) of the Table hereto annexed (hereinafter referred to as the "said goods") manufactured in a factory as a job work and :- (a) used in relation to the manufacture of final products, specified in column (3) of the said Table, - (i) on which duty of Ex....
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.... undertaking to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction over the factory of the job worker that the said goods shall be (a) used in or in relation to the manufacture of the final products in his factory; or (b) removed from his factory without payment of duty - (i) under bond for export; or (ii) for removal to a unit in a free trade zone or to a hundred per cent. export-oriented undertaking or to a unit in an Electronic Hardware Technology Park or Software Technology Parks or for supply to the United Nations or an international organisation for their official use or for supply to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 108/95-Central Excises, dated the 28th August, 1995, or (iii) by a manufacturer of dutiable and exempted final products, after discharging his obligation in respect of said goods under rule 6 of the CENVA T Credit Rules, 2002; ....
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....bjected to the process at the recipient's ends and only thereafter they are cleared by the principals either in the form of assembly or sub-assembly or as tested spares. It is his assertion that they have fairly paid duty on the value addition part of the product. 6. Ld. Departmental Representatives reiterates the findings of the impugned orders and asserts that it is not open for the appellant to pick and chose as to on what part of the value they would pay duty and on what part they would not. It is his assertion that Section 4 of Central Excise Act as well as Central Excise (Valuation) Rules, nowhere provide for the appellant to pay duty only on the "value addition". Therefore, the demands have been correctly confirmed and need to be upheld. 7. After hearing both sides and perusing the records, we find that the crux of the matter is whether the appellant has operated under Notification No. 214/1986-C.E., dated 25-3-1986 as asserted by the assessee or not operated under it, as asserted by the department. This fact needs to be ascertained. It may be ascertained by examining the records and returns of the appellant and whether they have received the goods and transf....
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....itical factor while determining whether a tax is leviable or otherwise. The taxable event in the case of Excise duty is the manufacture, in case of sales tax, it is the act of selling, in case of Customs it is the act of import or export, in case of Income Tax, it is the act of earning income, etc. There is no tax with "value addition" as the taxable event. There is indeed value addition in the economy at various stages but no Excise duty is leviable on it and Excise duty is leviable only on the manufacture. The measure of tax is the next question to be considered. The measure of tax in case of Excise duty is determined by Section 4 of the Central Excise Act, Central Excise Valuation Rules, 2000 and the Central Excise Tariff. We find that neither Section 4 nor the Central Excise Valuation Rules have any provision under which Excise duty can be levied on the manufacturer only to the extent of his "value addition". We, prima-facie, do not find any basis for such a scheme of operation by the assessee appellant. 11. However, in order to avoid cascading effect of the taxes, certain relief by way of set off has been provided in the form of CENVAT Credit whereby the manufacturer i....