2022 (4) TMI 424

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....and of recovery of Cenvat credit of Rs. 2,57,38,894.67/- along with interest and penalty on the Appellant. 2. The facts of the case in brief are that the Appellant is engaged as job worker by M/s. Tata Motors Limited for the purpose of Machining, Turning etc. on the Engine block being supplied by M/s.Tata Motors Limited under the procedure as prescribed under Notification No.214/86 dated 25/03/1986. Thus the Appellant was removing the goods to M/s.Tata Motors Ltd without payment of any Central Excise duty under returnable challans. The Appellant had obtained Excise registration for the purpose of manufacturing Cylinder block. They had also availed Cenvat credit of capital goods procured in order to manufacture cylinder block as well as car....

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.... for Modvat credit of duty on the inputs used in the manufacture of parts, which were cleared without payment of duty to the assessee's other unit under Chapter X procedure and utilised in the manufacture of tractor, which were cleared on payment of duty holding that no duty was paid on the parts at the time of clearance. It held that Rule 57C will apply and no Modvat credit would be admissible. Such a view, on appeal, was reversed by the Supreme Court in Escorts Ltd. v. Commissioner of Central Excise, Delhi [2004 (171) E.L.T. 145 (S.C.)], wherein the Supreme Court held as hereunder :- "8. It is to be seen that the whole purpose of the notification and the rules is to streamline the process of payment of duty and to prevent the cascading ....

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....eared without payment of duty. Pausing here for a second, let us take a situation where the basic inputs is sent by the principal manufacturer after debiting the Modvat credit taken by him. The job worker takes the credit of the same his factory, utilises other inputs procured directly by him after taking the Modvat credit on the same and clear the processed goods to the principal manufacturer on payment of duty and the principal manufacturer takes the credit of the same in his factory and utilises such credit for payment of duty on his final products at the time of clearance. In such a situation, there can be no objection or dispute by the revenue as regards the admissibility of the credit on the inputs received directly by the job worker ....

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....l Excise [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 in the said letter of the Law Ministry that the term 'exempted' has a definite connotation. The same as attributed to the notification issued by the Central Government. Similarly, the chargeable to nil rate of duty would refer to the tariff rate being nil and the goods cleared in terms of provision of Rule 199BB would not be covered by the ....