WHIRLPOOL OF INDIA LTD. Vs. CCE

JUDGEMENT

(1.) The common issue involved in all these four appeals arising out of a common Order -in -Appeal No. 145 -148/2002 dated 30.09.2002, is whether M/s. Whirlpool of India Ltd. can clear moulds without reversing the MODVAT Credit availed thereupon.

(2.) Shri B.L. Narsimhan, learned Advocate, submitted that the appellants manufacture washing machines and avail MODVAT Credit of the duty paid on the moulds any dyes; that appellants placed orders for parts of washing machines on their job workers, namely, M/s. Supreme Industries Ltd., Pondy, M/s. Brite Automotive and Plastics Ltd., Pondy and M/s. Barani Enterprises, Chennai that the job workers used their own raw -materials in manufacturing the parts according to the design and specifications of the appellants; the for this reason, the appellants supplied moulds and dyes free of cost to the job workers under rule 57S (8) of the Central Excise Rules, 1944; that the Assistant Commissioner has confirmed the demand against them on the ground that the job workers cannot be considered as job workers in as much as they were purchasing their own raw -materials for manufacturing the parts of washing machines and clearing the same on payment of duty; that the Commissioner (Appeals) also, in the impugned order, has rejected their appeals agreeing with the Assistant Commissioner that the relationship between the appellants and manufacturers of parts is on principal to principal basis. Learned Advocate, further, submitted that the question whether the job worker for the purpose of applying Rule 57S(8), can be a person who is using his own raw -material, has ben settled by the Tribunal in the case of Monica Electronics vs Commissioner of Central Excise, New Delhi, 2000 (123) E.L.T. 1047 (T); that the Tribunal has held that a perusal of rule 57S and the sub -rules (8), (9) and (10) of Rule 57S reveals that rule making authority did not have any intention to give the expression 'job worker' used in sub -rule (8), the meaning given to it in the Exemption Notifications like Notification No. 214/86. In the said Notification, "job worker" is supplied with the raw -material by the manufacturer and the job worker clears the manufactured goods from his factory after utilising the raw -materials supplied by the manufacturer. The intention is to exempt the job worker of duty liability as a manufacturer. Moulds and dyes are not materials which get consumed in the process of manufacture by the job worker. The scheme of Rule 57S and sub -rules (8) to (10) thereof does not, therefore, appear to be compatible with the definition of "job worker" in the said Notification. He, further, mentioned that the decision in the case of M/s. Prestige Engineering (India) Ltd., vs C.C.E., 1994 (73) ELT 497 (SC), is not applicable to the facts of the present matters, as the said decision was dealing with the aspect of interpretation of Notification No. 119/75 -CE dated 3034.1975 that the Tribunal in the case of Anusika Autolite Ltd. vs CCE, Jaipur, 2002 (53) RLT 186 (CEGAT) has clearly held that "meaning assigned to the expression "job worker" by the Hon'ble Supreme Court in their judgement in M/s. Prestige Engineering (India) Ltd., supra, cannot be made applicable to the facts of the present case since the said judgement does not deal with the subject of capital goods sent to another party for job work as is the case in the present appeals." The ratio of the said decision squarely applies to the facts of the present matters. He also emphasised that it is not in dispute that the cost of moulds is mortised and added to compute the value of the parts manufactured by the job worker and on such value duty is discharged.

(3.) Countering the arguments, Shri D.N. Choudhary, learned S.D.R., submitted that the units are manufacturing parts of washing machines on their own account as they are buying the raw -materials; that thus they cannot be regarded as job workers of the appellants; that moulds and dyes are given by the appellants to these units so that the parts are manufactured according to designs and specifications of the appellants; that it is apparent from requirements of the Hon'ble Supreme Court in the case of Prestige Engineering (India) Ltd. vs CCE, supra that where the raw -material is not supplies by the customer, there is no question of such manufacturer being termed as job worker; that mere fact that all the units manufacture parts of the washing machines, they cannot be regarded as job workers; that their relation is on principal to principal basis; that the ratio of the decision in the case of Monica Electronics vs CCE, New Delhi, supra, is not applicable as the appellants, therein, were debiting the credit at the time of sending the moulds and dyes to the job workers; that in the present matters, the appellants, herein, are not debiting the credit already taken by them in respect of moulds an dyes. Learned S.D.R., further, submitted that Rule 57A (1) clearly provides that capital goods in respect of which credit of duty has been allowed, be removed from the factory for home consumption on payment of appropriate duty of excise; that it is clear that the capital goods can be removed from the factory premises only on payment of appropriate duty; that as in the present matters, the duty has not been discharged at the time of clearing the goods, duty is payable by them. He, further, contended that sub -rule (8) of Rule 57S provides for removal of moulds and dyes without payment of duty to job worker for the purpose of production of goods according to his specification; that this sub -rule is a sort of exemption from payment of duty, and, therefore, has to be construed strictly and that moulds and dyes have to be supplied to a job worker for getting the benefit of sub -rule (8), that as the moulds and dyes have not been sent to the job worker in the present matters, the benefit of this sub -rule will not be available to the appellants. He also referred to G.P,. Singh's Principles of Statutory Interpretation, in support of his contention that the intention of Legislature is to be gathered from the language used which means that attention should be paid to what has been said as also to what has not been said; that it is, further, mentioned in the said Book that 'a construction which requires for its support addition or substitution of words or which results in rejection of words as meaningless has to be avoided. " Reliance has also been placed on the Principles of Statutory Interpretation wherein it is mentioned that "when words acquire a technical meaning because of their consistent use by the Legislature in a particular sense or because of their authoritative construction bonny superior courts, they are understood in that sense when used in a similar context in subsequent legislation." Learned SDR contended that accordingly the expression 'job worker' as defined by the Hon'ble Supreme Court in Prestige Engineering (India) Ltd. vs .CCE, Supra, has to be made applicable while interpreting sub -rule (8) of Rule 57S.