TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 752
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.... 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 Excise is leviable in whole or in part; or (ii) for remova....
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....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; or (c) removed on payment of duty for home consumption from his factory; or (d) used in the manufacture of goods of the descripti....
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.... 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 transferred them to the principal manufacturers and whether the principal manufacturer has given an undertaking as required and whether the principal manufacturer has discharged duty thereof. If these and other conditions are fulfilled and the ....
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....se 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 is allowed to take credit of the duty paid on the inputs or input services and use it to pay duty which they are required to pay on the final products. This, of course, does not give the manufacturer an option to say that he will not take credit o....