Cce, Jaipur Ii vs M/S Ranjan Polysters Ltd

[Arising out of the Order-in-Appeal No. 181 (HKS)-CE/JPR-II/ 2006 dated 20/03/2006 passed by The Commissioner (Appeals-II), Customs & Central Excise, Jaipur.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

CCE, Jaipur  II Appellant

Versus

M/s Ranjan Polysters Ltd. Respondent

Appearance

Shri S. Nanchuk, Authorized Representative (Jt. CDR)  for the appellant.

Ms. Surabhi Sinha, Advocate  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52863/2015 Dated : 14/09/2015

Per. Ashok Jindal :-

Revenue is in appeal against the impugned order wherein the learned Commissioner (Appeals) allowed the benefit of Rule 57F of the Central Excise Rules, 1944 to the respondent.

2. The brief facts of the case are that respondent was engaged in manufacture of Texturised Polyester Filament Yarn falling under CTH 5402 of CETA, 1985. The respondent undertook process of dyeing of Texturised Polyester Filament Yarn on behalf of M/s Bhiwani Textile Mills, Bhiwani on job work basis. The said dye Texturised Polyester Filament Yarn was further utilized for manufacture of manmade fabrics falling under CTH 55 of CETA, 1985 by M/s Bhiwani Textile Mills. The manmade fabrics of Chapter 55 are excluded from the list of specified final product given under table of Notification No. 214/86-CE dated 25/03/1986, therefore, Revenue is of the view that the exemption from duty on dye Texturised Polyester Filament Yarn was not available under Notification No. 214/86-CE ibid. In these set of facts, a show cause notice was issued to the respondent to demand duty on dye Texturised Polyester Filament Yarn for the period December 1999 to January 2000. The adjudication took place demand of duty was confirmed and penalty of Rs. 25,000/- was imposed on the respondent. On appeal, the learned Commissioner (Appeals) set aside the adjudication order.

3. Aggrieved from the said order, Revenue is before us.

4. The learned AR submits that the respondent are not entitled for the benefit of Notification No. 214/86-CE ibid. Moreover, as per Rule 57F of Central Excise Rules, 1944 the supplier of input was required to debit an amount of 10% of the value of inputs while clearing the inputs to the appellant for converting into dye Texturised Polyester Filament Yarn which the supplier of input to fail to do so. Moreover, the respondent fail to produce an evidence that the supplier has suffered duty on the final product, therefore, respondent is required to pay duty thereon and in these terms, the impugned order to be set aside.

5. On the other hand, learned Counsel appearing on behalf of the respondent submits that the case of the respondent is covered by Rule 57F (4) of Central Excise Rules, 1944 as respondent got the job work to be done of dyeing was done by the respondent on Texturised Polyester Filament Yarn and after execution of job work of the goods in return to the principal manufacturer and as per CBEC Circular No. 306/22/97-CX dated 20/03/1997, the respondent is not liable to pay duty. Therefore the impugned order to be upheld.

6. Heard the parties and considered the submissions.

7. In this case the respondent were doing job work of dyeing on Texturised Polyester Filament Yarn supplied by M/s Bhiwani Textile Mills, Bhiwani on job work basis. The respondent whatever inputs have been received, the same has been returned to the principal manufacturer after execution of the job work. Therefore, the CBEC Circular No. 306/22/97-CX dated 20/03/1997 applies to the facts of this case, wherein it has been observed :-

2. Under the provisions of Rule 56F (4), a manufacturer can get the job work done on his inputs or in partially processed inputs in terms of the provisions of Rule 57F (4) of the Central Excise Rules, 1944. In such cases duty liability is required to be discharged by the manufacturer and not by the job workers. Accordingly job worker is not eligible to avail credit in such cases.

8. As per the said Circular, the duty liability is on the manufacturer not on the job worker. If the supplier has not reversed 10% of the duty Cenvat credit on the inputs, it is the supplier is to be asked to reverse the same, not the respondent. Moreover, the duty liability is to suffered on the final product by the principal manufacturer not on the job worker i.e. the respondent. Therefore, the provision of Rule 57F (4) of Central Excise Rules, 1944 are squarely to be applicable to the facts of this case. In this situation, the respondent is not liable to pay any duty. Accordingly, we do not find any infirmity with the impugned order same is upheld.

9. Appeal filed by the Revenue is dismissed.

(Operative part of the order pronounced in the open court.)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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