COMMISSIONER Vs. LIBRA STEELS (P) LTD.

JUDGEMENT

(1.) This appeal filed by the Commissioner of Central Excise under Section 35G of the Central Excise Act is against the order of the CESTAT allowing the appeal filed by the respondent, by which demand raised on them and confirmed in first appeal was cancelled by the Tribunal.

(2.) In spite of service of notice, respondent has not chosen to appear before this Court. Therefore, we heard Assistant Solicitor General appearing for the appellant.

(3.) The facts leading to the controversy as evidenced from the records are the following. Respondent made steel ingots in their plant and supplied the same to job worker, namely, M/s. Palakkad Steels, for conversion of the same into re-rolled products and for returning re-rolled products to the respondent, which marketed it. Even though duty was payable by the manufacturer of the hot re-rolled products under notification No. 214/86, respondent admittedly, cleared ingots to the job worker in terms of Rule 57F(3) of the Central Excise Rules without payment of duty on the ground that if there is duty liability on the final product, respondent will pay the same. However, when the re-rolled products were received back and cleared by the respondent, they claimed the benefit of notification No. 16/97, which provides for exemption to SSI units. Since respondent was not engaged in the manufacture of the items cleared, duty was demanded on the final product by disallowing exemption under Notification No. 16/97. Even though demand was confirmed in first appeal. Tribunal reversed the same and cancelled the demand, against which this appeal is filed.