CCE Vs. RAHUL CHEM FARM (P) LTD. KIRAN

JUDGEMENT

(1.) THE respondents were denied Modvat credit by the original authority for the period 1996 -97, but the first appellate authority allowed the benefit to them. Hence these appeals of the department.

(2.) THE respondents, during the relevant period, supplied 'soda ash' to their job workers under Rule 57F(3) of the Central Excise Rules, 1944 and the latter converted the same into 'sodium silicate', which was supplied to the former in terms of the said provision. The respondents, upon receipt of the finished goods, cleared the same on payment of duty, for home consumption in terms of Clause (a)(iii) of Sub -rule (3) of Rule 57F. Towards such payment of duty, they utilized Modvat credit of the duty paid on soda ash. It was such credit which was disallowed by the original authority and allowed by the first appellate authority.

(3.) LD . SDR reiterates the ground of appeal, which is to the effect that the respondents were not entitled to the benefit of input duty credit as no part of the manufacturing activity (conversion of soda ash to sodium silicate) was performed in their factory. Ld. counsel for the respondents has contested this ground on the strength of express provisions of Rule 57F(3) as the Rule stood at the material time. We have also perused the provisions and we find that, in terms of Clause (a) of Sub -rule (3) of the rule, it was open to a manufacturer to get his input fully processed into final product in his job worker's premises and then to retrieve such final product and remove it from his own premises on payment of duty, for home consumption. In such a situation, the job worker was receiving only his job charges. The law recognized the input -supplier as the "manufacturer" of the final product and, if that be so, it was within his right to take input duty credit and utilize the same for payment or duty on the final product. This legal position stands established through a catena of decisions of this Tribunal vide, for instance, CCE Pune v. Indian Seamless Metal Tube Ltd., 2006 (196) ELT 418 (Tri. -Mum). Ld. Commissioner (appeals) has followed the law so established. His order is sustained and these appeals are dismissed.