TaxTMI 
TaxTMI 
2024 (3) TMI 67
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.... Ltd, to whom orders were awarded for manufacture of goods, such as 'cylinders', 'valves', and 'hydraulic power packs', with some material requirements, generally of high value, supplied by the former and the rest, generally of lesser value and comprising the billing too, procured by the latter, on the one hand and, on the other hand, the supply of such finished goods to customers of the appellant against delivery challans for which invoices are raised by the appellant. This business model of the appellant has been held by central excise authorities to be contrived arrangement for availing ineligible credit. 2. The dispute pertain to availment of credit of duty paid on procurement of goods without being reversed on transfer to the contract....
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....exchanger', 'filters and filter elements', 'hydraulic valves', 'hydraulic pumps', 'manifold blocks', 'electric junction boxes' etc were supplied to their 'job-workers' on which CENVAT credit had been availed at the time of procurement and as these were transferred against 'delivery challan', owing to which reversal of credit as per rule 4(5)(a) of CENVAT Credit Rules, 2004 was not required. It was pointed out manufacture was effected by 'job work' as it occurs in accordance with plans furnished by, and on instructions of, the appellant with consideration being 'job work' charges and cost of materials used in such manufacture entitling excise duty paid thereon to be availed as credit as afforded by CENVAT Credit Rules, 2004. Drawing attentio....
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....judicating authority had erred in concluding that such arrangements did not conform to 'job work' commercially. 6. According to Learned Authorized Representative, the impugned order has brought out the ineligibility for credit availed on both counts. Thereafter, he drew attention to the revised practice of the appellant after April 2013 which, in his view, reflected the correctness of the stand on ineligibility that was adopted by the adjudicating authority. 7. The appellant appears to have undertaken supply of equipment to customers for which they contracted with specialist entities which, by using articles supplied by appellant and others manufactured/procured at their end, executed the works for delivery to customers of the appellant. ....
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....f, an assessee must be determined only within that purposive framework. The law recognizes 'job worker', not in terms of contractual relationship or commercial comprehension of the expression, only as an entity, otherwise liable to duties of central excise devolving on manufacture, eligible to be relieved of that burden upon assumption of such obligation by the principal manufacturer; all other terms and conditions - which are part and parcel of the enabling exemption notification - are merely safeguards to ensure that the liability arising on taxable event is not alienated from both. It would appear that the extension of this 'conceptual intermediate' to CENVAT credit scheme has been visualized by tax authorities as external to, and indepe....
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....rmination of this dispute. 11. Underlying the existence of CENVAT credit scheme is the empowerment vested by law to prescribe the manner of payment of duty, which itself is a function of classification, in terms of the charging provision, and value, in terms of the valuation provision, comprising actual payment and debit of CENVAT balance. The scheme enables bridging of the charging and valuation provisions to restrict the collection of duty to 'value added' by a manufacturer. CENVAT Credit Rules, 2004 is a compilation of machinery provisions for operation of the scheme. The principle of 'manufacturer being charged to duty on manufacture' is the tool to interpret ambiguity, if any, in the said Rules, and not appearing to have impressed its....