TaxTMI 
TaxTMI 
2023 (11) TMI 364
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....tured Aluminium Die Cast Components Engine part on job work basis for M/s Rockman Industries Ltd. and took job work charges @ Rs 11 or 11.60% and paid service tax thereon. The Revenue was of the view that the process of conversion of Metal into Engine Components involved excisable goods and this manufacture/production of goods does not constitute a taxable service as defined under the Finance Act, 1994 because such manufacture or production falls under the Negative List as defined under section 66 D (f) of the Finance Act, 1994 and, therefore, the service tax paid by the appellant was not applicable on the job work charges. 3. In order to avail the exemption from payment of duty under job work Notification No. 214/1986-CE dated 25.03.1986, the goods manufactured at the end of principal manufacturer using the goods manufactured by the appellant were required to undergo payment of duty or if such goods are sold as such the duty must be paid on such goods. The principal manufacturer - M/s Rockman Industries Ltd. were availing area exemption under Notification No. 50/2003 - CE dated 10.06.20003 and, therefore, were not paying central excise duty on their final products. Since the pr....
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....dition would be equal to service tax paid in cash. They relied on the decision of the Rajasthan High Court and also of this Tribunal to say that cenvat credit is permissible on the basis of debit notes. Lastly, according to them extended period of limitation cannot be invoked as there is no suppression on their part. 8. The Revenue relied on the findings of the Authorities below and according to them from the process involved, it is clear that the appellant was manufacturing Pressure Die Component from Aluminium, which amounts to manufacture and were, therefore, liable to pay excise duty. They also referred to the non-compliance of the condition of the job work exemption notification in the present case and in support thereof relied on the decisions laying down the principles for construction of exemption notification. On the issue of cenvat credit, the learned Authorised Representative for the Revenue referred to the findings that the debit notes are not the specified document as per Rule 9, therefore, no benefit of cenvat credit can be allowed to the appellant. 9. The following two issues arise for our consideration : "(i) whether the process of conversion of metal....
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....ise duty to the customers, namely M/s Havells India Pvt. Ltd., M/s Onkar Engine & Generator (P) Ltd etc. after availing cenvat facility provided under the CCR, 2004. II- Secondly, they were also manufacturing pressure die components from Aluminium supplied by M/s Rockman on job work basis." Taking into account the above two types of transactions, it is sufficient to hold that the process undertaken by the appellant amounts to manufacture and that is why he was paying excise duty when he was selling the same product to other companies. This also nullifies the contention of the appellant that the goods manufactured are not marketable just because they are unfinished. In fact, the Larger Bench in Thermax Babcock & Wilcox Ltd V Commissioner of C.EX., Pune, 2018 (364) ELT 945,decided the issue whether the job worker was liable to pay duty on intermediate manufacture of parts of boiler against the party. 11. Having come to the conclusion that the Die Casting of Components from Aluminium after finishing through machines results in manufacture, the necessary corollary will be that the appellant is liable to pay excise duty and not service tax. The provisions of section 66D o....
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.... In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government 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 (2) of the said Table, (i) on which duty of excise is leviable in whole or in part; 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 organization 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 dut....
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....ndertakes the responsibilities of discharging the liabilities in respect of Central Excise Duty leviable on the final products. Explanation I. - For the purposes of this notification, the expression "job work" means processing or working upon of raw materials or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for the aforesaid process. Explanation II shall be omitted. (vide Notification No. 33/2000-C.E., dated 31-3-2000) Description of Inputs Description of final product (1) (2) All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than high speed diesel oil and motor spirit, commonly known as petrol. All goods falling under the 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 Nos. 58.01, 58.02....
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....fication No. 214/86-C.E., dated 25-3-1986 that the liability of the job worker to pay duty is transferred to the principal manufacturer who undertakes to pay duty. 7.7 The intention of enactment of Notification (supra) was to shift the liability of payment of duty from job worker to the principal manufacturer under certain conditions as provided in the said notification. There is no blanket machinery provisions in the Central Excise law under which the liability to pay duty is transferred from the job work manufacturer to another person i.e. principal manufacturer. However when the principal manufacturer does not own up the liability to pay duty on finished goods, the provision of Notification No. 214/86-C.E., dated 25-3-1986 does not apply. In that case, it is the ultimate manufacturer i.e. the job worker who has to pay the duty. Following the procedure and conditions of the Notification (supra) only by the principal manufacturer, the job worker would be saved from payment of duty on goods manufactured by him." 13. We may now consider whether in the facts of the present case, the appellant is entitled to the benefit of the exemption notification. The principal manufact....
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....ty under the provisions of Section 11 AC of the Act, relying on the decision of the Apex Court in the case of Chairman, SEBI Vs. Shriram Mutual Fund - 2006 5 SCC 361 that mens rea is not an essential element for imposing penalty. Further, in view of the law laid down in Union of India Vs. Rajasthan Spinning and Weaving Mills - 2009 (238) ELT 3 (SC) that once the ingredients to attract the provisions of Section 11 AC are attracted, the discretion to quantify the amount of penalty ends and in view thereof, the Adjudicating Authority has rightly imposed the penalty equal to the duty amount. Similarly, interest under Section 11AA has also been rightly imposed as the appellant knowingly and deliberately evaded payment of excise duty. 15. The second issue as to whether the appellant is entitled to take cenvat credit on the strength of debit notes, which is not the document prescribed under Rule 9(1) of the CCR, 2004 to avail the cenvat credit, is no longer res-integra and has been decided by the High Court of Rajasthan in the case of Commissioner of Central Excise, Jaipur -1 Vs. Bharti Hexacom Ltd, 2018 (360) ELT 515. The Division Bench decided the issue after considering the long lin....
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.... also relied on a latest decision of the Ahmedabad Bench in Kevin Process Technology Pvt Ltd V Commissioner of C EX., Ahmedabad 2021 (378) ELT 441, wherein the Tribunal relying on Bharti Hexacom (supra) has held that as per Rule 9 of CCR, 2004 not only invoice or bill of entry but any other document can also be valid document for availing credit and debit note containing all the details as required to be mentioned in cenvatable documents. 17. We are fully bound by the law laid down in these decisions and particularly the decision of the Rajasthan High Court in Bharti Hexacom (supra), which seems to have been accepted by the Revenue as no appeal seems to have been filed challenging the same. In the light of the law laid-down, we may now examine the facts of the present case. The learned Counsel for the appellant had filed the supplementary paper book on 3rd June 2022, where at Serial No.4, he has annexed the copies of the debit notes along with the chart showing the details of the debit notes. On perusal of the debit notes, we find that they contain all the particulars and details, as are required to be mentioned in the invoice to avail the cenvat credit. Consequently, the appell....