COMMISSIONER OF CENTRAL EXCISE BANGALORE-III COMMISSIONERATE BANGALORE Vs. SOUTH INDIA WIRE PRODUCTS PVT LTD

JUDGEMENT

(1.) REVENUE is aggrieved with Order-in-Appeal No.92/2005 CE dated 13.9.2005 by which the Commissioner (A) has upheld the prayer of the assessee to avail cenvat credit in respect of inputs used in the manufacture of job work goods which are sent to their principal manufacturer under Notification No. 214/86 CE dated 25.3.1986. The finding portion of the commissioner (A) is reproduced herein below. Findings: I have gone through the case records, written submission made in the grounds of appeal and also the oral submission made at the time of personal hearing. The issue to be decided in this matter is whether the goods manufactured on job work basis by the appellant, under Notification No.214/86 CE dated 25.03.1986, are exempted goods for the purpose of Rule 6 of Cenvat Credit Rules, 2004. I find that the appellants have availed Cenvat credit in respect of common inputs used in the manufacture of dutiable as well as job work goods. The job work was undertaken under Notification No. 214/86 CE dated 25.03.1986. As per the said notification, job work goods are exempted from duty in the hands of job worker subject to the condition that they are either used by the principal manufacturer in the manufacture of finished goods on which duty is payable or removed as such by the said principal on payment of appropriate duty. Further, an undertaking to this effect has to be furnished by the principal manufacturer to the Assistant Commissioner of Central Excise having jurisdiction over the factory of job worker. I find that it is very clear from the above conditions that the job work goods are not exempted from duty as such. They can be cleared as such by the principal only on payment of duty. The appellant also refers to the case law of M/s. Sterilite Industries (I) Limited Vs. CCE Pune - 2005(185) ELT 353(Tri - LB) where in the Honorable Tribunal held that the credit of duty paid on inputs used in the manufacture of final products cleared without payment of duty by job worker for further utilization in manufacture of dutiable final product by principal manufacturer would not be hit by the provision of Rule 57C of the CER. 1944. I further find that in case of Bharat Fritz Werners Ltd Vs CCE Bangalore Ill Commissionerate, the Honorable CESTAT Bangalore in final order no. 1011/2005 dated 23.6.2005 have decided that goods which ace sent to the principal manufacturer are not exempted goods. I therefore hold that the appellant is eligible for cenvat credit in respect of inputs used in the manufacture of job work goods which are further sent to their principal manufacturer under Notification No. 214/86. In view of above discussions, I set aside the OIO No.57/2005 dated 14.7.2005 passed by the Assistant Commissioner of Central Excise, Rajajinagar division, and allow the appeal filed by M/s. South India Wire Products Pvt. Ltd., Bangalore.

(2.) WE heard both sides in the matter. WE notice that the issue is fully settled in assessees favour in terms of Larger Bench judgment of the Tribunal rendered in the case of M/s. Sterlite Industries (I) Ltd. Vs. CCE, Pune - 2005 (183) ELT 353 (Tri.-LB). The finding portion of this judgment in Para 3-6 are reproduced herein below.

(3.) AS regards the decision in the case of Alpha Lavan laying down that the Modvat credit could be claimed in such a situation, we find the earlier decision of the Bajaj Auto was not followed. However, in view of the facts that the ratio of Bajaj Auto decision stands approved by the Supreme Court decision in the case of Escort Ltd. referred supra, we are of the view that the Alpha Lavan is no longer good law.