CCE Vs. COATS VIYELLA (I) LTD.

JUDGEMENT

(1.) BOTH the appeals are filed by the Revenue against the order in Appeal No. 32 and 33/98 -MDU dt. 12.5.1998 by which the Commissioner (Appeals) has held that the Respondents are not liable to pay additional duty of excise in respect of the goods manufactured by them and consumed captively and cleared inasmuch as there was no loss of Revenue to the Government whether the additional duty of excise is paid at the time of clearance of Grey tyre cord fabrics captively consumed or at the time of clearance of the dipped tyre cord warp sheets. He also held that law does not authorise for the levy of duty second time on the product falling under the same chapter sub headings. Similarly, in respect of job works as regards to clearance of the Grey Tyre Cord fabrics which are captively consumed in the manufacture of Tyrecord warp sheet and which were cleared under the provisions of Rule 57F(3) of the Central Excise Rules, 1944 read with Notification No. 214/86 -CE dt. 25.3.1986, he held that duty liability in such cases rested with the original manufacturer and not with the job worker. Ld. Commissioner had also relied on the Board's circular No. 306/2297 -CX.6 dt. 20.3.1997 wherein it was clarified that the duty liability was required to be discharged by the manufacturer and not by the job workers.

(2.) APPEARING on behalf of the Revenue Ld. SDR Smt. Bhaghya Devi submitted that the appellants manufacture Grey tyrecord fabric falling under Chapter sub heading 59.02 for their own consumption and also on job work basis. The Grey Tyrecord fabric is captively consumed in the manufacture of dipped grey tyre cord fabrics falling under the same heading 59.02; for manufacture on job work basis they received Nylon yarn/Polyster yarn by availing the provisions of Rule 57F(3) read with Notification No. 214/86 -CE dt. 25.3.1986. She further submitted that when grey tyrecord fabric is consumed, additional duty of excise is payable as Notification No. 67/95 exempts only the basic excise duty. As regards the goods cleared under Notification No. 214/86 it exempts basic excise duty only and the additional duty of central excise is leviable. She also submitted that. -

(3.) APPEARING on behalf of the respondent (assessee) authorised representative Shri S.S. Thakur submits that they have two streams i.e. (1) product they manufacture on their own behalf as well as they manufacture goods for others. They manufacture grey tyre cord fabrics used captively as intermediate product for the manufacture of dipped tyre cord fabrics. They also received Nylon filament yarn/Polyester yarn and manufacture the grey tyre cord fabrics as well as dipped tyre cord fabrics on job work basis and the raw materials namely modvated inputs are received by appellants after following the procedure prescribed under Rule 57F(3) and F(4) of the CE Rules and returned the goods after carrying out necessary processes to the original manufacturer. The Ld. Consultant fairly conceded that in respect of first consumer that is where grey tyre cord fabrics, the intermediate products are captively consumed in the manufacture of dipped tyre cord fabrics. They are required to pay an additional duty of Central Excise as the notification No. 67/95 did not exempt the goods from the additional duty of Central Excise. He also submits that this additional duty of central excise has already been paid by them in respect of the grey tyre cord fabrics which has been captively consumed in the manufacture of dipped tyre cord fabrics and have also taken modvat credit. As regards the goods manufactured by them on job work basis the Ld. Consultant submits that they are not required to pay any duty in view of the Judgment rendered by the CEGAT in the case of M. Tex and D.K. Processors (P) Ltd v. CCE, Jaipur reported in 2001 (136) ELT 73 (T) : 2001 (94) ECR 353 (T). The above Judgment of the CEGAT has been upheld by the Hon'ble Apex Court by dismissing the appeal filed by the Revenue . The Apex Court had decided the matter against the Tribunal (Sic Revenue) by hearing the Attorney General on the circular of the CBEC No. 306/22/97 -CX dt. 20th March, 1997. He further submitted that the Ld. Attorney General after examining the same had conceded that the circular covers the facts of these cases against the Revenue and the appeals filed by the Revenue are therefore dismissed by the Hon'ble Apex Court. The Appellate Tribunal in its impugned order by majority order has held that the appellants as job workers who received the inputs (fabrics from the principal manufacturer under challan issued under Rule 57F(4) and returned the said goods after carrying out the processes and return it to the principal manufacturer on job work basis were not liable to pay duty on the processed fabrics so returned. Therefore, he submitted that basic excise duty as well as additional duty of central excise has been paid by the original manufacturers at the time of clearance of goods, they were, therefore, not required to pay additional duty of central Excise as demanded by the Revenue.