M/S. Talent Steel Industries Pvt. Ltd vs Cce, Coimbatore
- Citationappeal No. E/798/2004. Appellant TSIPL cleared its goods duty free on the basis of Notific
Ratio decidendi
The rule this decision rests on
Where a job worker converts scrap supplied by a principal into ingots, the principal's liability to duty on its own finished goods made from those ingots cannot be imposed merely because the job worker's ingots were not duty-paid; the principal's entitlement to the exemption under the relevant notification is not defeated ipso facto by the non-payment of duty on the ingots by the job worker, and the principal's appeal is to be allowed with consequential relief to follow in accordance with law. Where the job worker, having been held liable to duty on the ingots it manufactured, is to be adjudged on its own liability, the assessable value of the ingots and the applicability of the relevant exemption notifications to the job worker must be determined by the adjudicating authority on remand, after granting a fair opportunity of hearing and passing a reasoned and speaking order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeals No. 453 & 455/2003-CE dated 26.12.2003, passed by the Commissioner of Central Excise (Appeals), Coimbatore).
1. M/s. Talent Steel Industries Pvt. Ltd. : Appellant 2. M/s. Talent Alloys (P) Ltd
Vs.
CCE, Coimbatore : Respondent
Appearance
Shri K.R. Natarajan, Adv., For the applicant
Shri K.P. Muralidharan, AC (AR) For the respondent
CORAM
Honble Shri D.N, PANDA, Judicial Member Honble Shri R. PERIASAMI, Technical Member
FINAL ORDER No. 40502-40503 / 2015
Date of Hearing/Decision: 30.04.2015
Per: D.N. Panda
Both the appeals No. E/797/2004 and E/798/2004 when heard analogous it reveals that appellant M/s. Talent Steel Industries Pvt. Ltd. (TSIPL) was manufacturer of bars and rods using ingots received from its job worker M/s. Tata Alloys Pvt. Ltd. (TAPL) which is in appeal No. E/798/2004. Appellant TSIPL cleared its goods duty free on the basis of Notification No. 7/97-CE dated 01.03.97. Applicability of this notification remained unquestioned on the face of law provided the inputs used by it has undergone suffering of duty.
2. The factual situation was that the appellant TSIPL was the procurer of scraps and sending the same to TAPL for conversion thereof to manufacture ingots for the former because TSIPL had no furnace for manufacture of ingots. There is no dispute by Revenue on the quantum of raw materials sent by TSIPL to TAPL nor there is any difference on the quantum of ingots received from TAPL. Revenues only allegation is that ingots cleared by TAPL not suffering duty, appellant is not entitled to benefit of notification No. 7/97-CE dated 01.02.97.
3. The adjudication orders passed in the case of TAPL and TSIPL arose out of the self same cause. Therefore, adjudication of TSIPL has a bearing on TAPL in so far as duty liability on the ingots is concerned. Records reveal that ingots manufactured by TAPL was using inputs supplied by TSIPL. Ingots became altogether a different product for dutiability. When TAPL was manufacturer of such ingots, its duty liability is undeniable. But, no duty being paid by TAPL, the finished goods made by TSIPL using ingots received from TAPL shall not ipso facto bringing the appellant TSIPL to duty liability on rods and bars manufactured by TAPL which were exempt from payment of duty in terms of notification No. 7/97-CE dated 01.03.97.
4. Both sides agree that the aforesaid factual and legal position is correct. In view of the settled position of law that duty shall be collected on ingots manufactured by TAPL, that concern is liable to duty.
5. At this stage, ld. Counsel says that when TAPL becomes liable to duty, then such liability in its hands should be determined in accordance with law following the due process of natural justice. Therefore, if a limited remand of the matter is made to determine the assessable value of the ingots, then there may not be difficulty to work out duty liability of TAPL. Ld. Counsel at this stage says that ld. adjudicating authority upon remand shall examine applicability of notification No. 214/86-CE dated 25.03.86 TAPL. So also he has to examine applicability of notification No. 7/97-CE dated 1.3.97. Ld. adjudicating authority shall accordingly do well to examine this aspect during re-adjudicating the matter of TAPL.
6. In view of the above reasoning and decision, appeal of TSIPL is allowed. Consequential relief if any shall follow in accordance with law. In so far as appeal of TAPL is concerned, that appeal is remanded to adjudicating authority on the very limited issue as enumerated above granting fair opportunity of hearing to the appellant to determine its liability if any in accordance with law, considering its submissions both on facts and law and shall pass a reasoned and speaking order.
(Order dictated and pronounced in the open Court)
(R. PERIASAMI) (D.N. PANDA) TECHNICAL MEMBER JUDICIAL MEMBER
BB 1
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