TaxTMI 
TaxTMI 
2022 (8) TMI 609
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.... the invoice of registered dealer. He submits that the said activity is trading activity and cannot tantamount to manufacture to attract any excise duty. He submits that there are judgments wherein, it was held that the transferring of chemicals from tanker to small drums cannot be said to be conversion from bulk pack to retail pack. As regard the labeling /relabeling, he submits that though the label was pasted but that does not render the product marketable, the product was already marketable. Therefore, merely by putting a label on the tanker cannot be said to have rendered the activity for marketing of the product, therefore, the activity in question does not amount to manufacture but it is only a trading activity, hence, no excise duty is payable on such activity. 2.1 On the second issue, he submits that if at all the activity is treated as manufacture even then the appellant is not liable to pay the excise duty on the ground that the entire activity was undertaken by the job worker therefore, the job worker becomes the manufacturer for which the duty demand cannot be made on the appellant. In this regard, he placed reliance on this Larger Bench judgment in the case of M/s. T....
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.... Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, and the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacturer of excisable goods, but also any person who engages in their production or manufacture on his own account; [Emphasis supplied] The definition of the manufacturer says that any person who is engaged in any of the activity specified in clause (i) to (iii) of Section 2(f) of the Act would be called as manufacturer. It is the manufacturer who under Central Excise Act and Rules is liable to pay duty unless otherwise exempted. The ownership of the goods is immaterial. Any person who undertakes the above activities being manufacturer, a jobworker engaged in any of the said activity is a manufacturer and is thus liable to....
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....r the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.] (3) An exemption under sub-section (1) or sub-section (2) in respect of any excisable goods from any part of the duty of excise leviable thereon (the duty of excise leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any excisable goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the statutory duty. Explanation. Form or method, in re....
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.... 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) for removal under bond for export, or (b) cleared as such from the factory of the supplier of raw materials or semi-finished goods - (i) on payment of duty for home consumption (on which duty of excise is leviable whether in whole or in part); or (ii) without payment of duty under bond for export; or (iii) without payment of duty 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 supplied to the United Nations or an international organisation for their official use or supplied 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"]. From the whole of the duty of excise leviable thereon, which is specified in ....
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....he First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely :- (i) matches; (ii) fabrics of cotton or man-made fibres falling under Chapter 52, Chapter 54 or Chapter 55 of the First Schedule to the said Act; (iii) fabrics of cotton or man-made fibres falling under heading No.58.01, 58.02, 58.06 (other than goods falling under sub-heading No. 5806.20), 60.01 or 60.02 (other than goods falling under sub-heading No. 6002.10) of the First Schedule to the said Act." In terms of the above notification, it transpires that it is only in respect of goods covered by Para (1) and Para (2) of the Notification, manufactured by the jobworker, are exempted only if the same are used by the Principal Manufacturer in relation to the manufacture of final products on which duty of excise is leviable or which are cleared as such from the factory of supplier of raw material or semi finished goods either without payment of duty under bond for export or on payment of duty for home consumption. Such exemption is applicable only to those goods in respect of which the supplier gives undertaking to the Assistant Commissioner of Central Excise having juri....
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....by the Principal manufacturer who has availed cenvat credit on such inputs. Pertinently, Rule 4 of the Cenvat Credit Rules is concerned with the conditions under which a manufacturer is allowed to avail cenvat credit. Rule 4 (5) (a), not cast any liability of duty upon the principal manufacturer who has sent the inputs for job-work other than the condition that in case of non receipt of goods within the stipulated period he shall be liable to reverse the cenvat credit availed on such inputs. The rule is confined to the scope of cenvat credit but has no relation with manufacture, manufacturer and payment of duty on the manufactured goods. 7.5 Similarly Rule 4 (6) is concerned with the condition under which the finished goods, manufactured from the inputs on which cenvat credit has been availed, can be cleared by the Principal manufacturer from the premises of job worker on payment of duty or for export under Bond subject to approval of the jurisdictional Commissioner of the Principal manufacturer. This rule is applicable only when principal manufacturer discharges the excise duty on finished goods which is manufactured by the job worker. This Rule does not allow the job worker to ....
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.... the Principal manufacture did not intend to pay duty on the final products, the jobworker who is manufacturer of intermediate goods is liable to pay duty. Non compliance of Notification No. 214/86 CE dt. 25.03.1986 by the Principal manufacture has resulted into duty liability upon the jobworker. Moreover, it is admitted by the appellant (job worker) that the inputs were not sent by the principal manufacturer under Notification No.214/86-CE. If the contention of the Appellant is accepted it would lead to the situation where neither the Principal manufacturer nor the jobworker would pay duty, which has not been legislated. 7.9 The Appellant has relied upon the Tribunal's order in case of M/s M.Tex & D.K. Processors P. Ltd Vs. CCE, Jaipur - 2001 (136) ELT 73 (TRI DEL) to support their views. However the facts are entirely different as the Principal manufacturer was sending goods to the jobworker in that case under rule 57 F (4) which reads as under : "57F(4) -The inputs can also be removed as such or after they have been partially processed by the manufacturer of the final products to a place outside his factory under the cover of a challan specified in this behalf ....
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....Ltd. Vs. CCE, Mumbai - 2014 (307) ELT 528 (TRI) and Mukesh industries Ltd. Vs. CCE, Ahmedabad - 2009 (248) ELT 203 (TRI) were rendered considering Rule 4 (5) (a) of Cenvat Credit Rules, 2001 and 2002 Rules as pari materia to 57 F (4) of erstwhile Central Excise Rules, 1944. However in our considered view Rule 57F (4) provided for payment of duty by the Principal manufacturer whereas Rule 4 (5) (a) only provides sending of cenvat availed inputs for jobwork and return of same to the Principal manufacturer implying that the Principal Manufacturer shall pay duty on the same. Accordingly those judgments are of no help to the Appellant. 7.13 Even the Tribunals order in case of Dhana Singh Synthetics Pvt. Ltd. Vs. Commissioner, Vapi - 2015 (326) E.L.T. 609 (Tri. - Ahmd.), is to the effect that the goods were received under rule 57 F (4) which itself stipulates the payment of duty by the Principal manufacturer and therefore no duty payment was required to be made. Since the principal manufacturer was paying duty, the jobwork was exempted from duty. Even the Tribunal Order relied upon by the Appellant in case of ESSAR STEEL LTD. Vs. CCE, RAIPUR - 2016 (341) ELT 145 (TR....
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....ty liability can be fastened upon the job-worker - Section 3 of Central Excise Act, 1944. [para 4]. Similarly in the case of Dhana Singh Synthetics Pvt. Ltd. v. CCE, (supra) it was held as under : Demand - Job worker - Fabric received by job worker accompanied with Challans issued under Rule 57F(5) of erstwhile Central Excise Rules, 1944 corresponding to Rule 4(5)(a) of Cenvat Credit Rules, 2002/2004, which returned after processing to principal manufacturer under said Challans without payment of excise duty - Demand raised as processed fabric not exempt under Notification No. 214/86-C.E. - HELD : Inputs received under Central Excise Challans and not under Notification No. 214/86-C.E. - As per C.B.E. & C. Circular No. 306/22/97-CX, dated 30-3-1997 for job work undertaken in terms of Rule 57F(4) ibid, duty liability to be discharged by principal manufacturer and not by job worker - No dispute that principal manufacturer cleared finished goods on payment of duty - Case of revenue neutral as any payment of duty by job worker will enable principal manufacturer to avail Cenvat credit - Order passed by adjudicating authority dropping proceedings against job worker upheld - ....
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....goods manufactured at Joboworker's end are exempted only if the same or the final product in which such intermediate goods are used are liable for duty at the end of the Principal manufacturer which is absent in the present reference. 7.17 In case of Collector Vs. Bright Steel Mac Fabrics - 1994 (69) E.L.T. 276 (Tribunal) as upheld by the Hon'ble Apex Court in case of CCE Vs. Bright Steel Mac Fabrics - 1997 (94) ELT A145 SC, the Tribunal has rightly held that Rule 57F (2) does not envisage return of inputs after completion of processing resulting in a semi-finished goods or intermediate goods without payment of duty. 7.18 In case of Desh Rolling Mills Vs. CCE, Delhi - 2000 (122) ELT 481 (TRI) the Appellate Tribunal confirmed duty demand upon the jobworker as the jobwork activity was not undertaken in terms of Notification No.214/86 -CE. The Tribunal held as under : "Notification No. 214/86 provides exemption to the goods manufacture in a factory as a job work and used in or in relation to the manufacture of final product on which duty of excise is leviable whether in whole or in part subject to the condition that supplier of the raw mater....
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.... Heat Transfer Equip. Mfrs. P. Ltd. - 2001 (135) ELT 861 Tribunal held that the Notification 214/ 86 CE envisages the duty payment by the supplier of the goods for jobwork if he undertakes to pay the same. In the normal course of business, it is the jobworker being manufacturer is liable to pay duty. We are in agreement with such views of the Tribunal as in absence of undertaking by the Principal manufacturer to discharge duty liability on the Jobworked goods, it is the manufacturer of goods i.e Jobworker who is liable to pay duty. The order of Tribunal in case of M/s Jinabakul Forge Pvt. Ltd. Vs. Commissioner - 1997 (93) ELT 373 (TRI) relied upon by the Revenue is also on the identical issue. Same views has been taken by the Tribunal in case of M/s International Engg & Mfg. Serv. P. Ltd. Vs. Commissioner - 2001 (135) ELT 551 (TRI). 7.21 Revenue has also relied upon the judgment of the Apex Court in case of M/s Empire Industries Ltd. Vs. UOI - 1985 (20) ELT 197 (SC) holding that neither hardship nor loss of benefit is criteria in fiscal statutes as the jobworker is liable to pay duty. Further, that the jobworker being manufacturer of intermediate goo....