COMMISSIONER OF CENTRAL EXCISE Vs. SRF LIMITED

JUDGEMENT

(1.) This appeal by the Revenue is directed against the final order passed by the Customs, Excise and Service Tax Appellate Tribunal dated 04.8.2008 raising the following substantial questions of law :

(2.) The issue, which fell for consideration before the Tribunal, was that the respondent assessee, which was engaged in the manufacture of nylon tyre cord fabrics during the period in dispute i.e. between May 2000 and August 2002, had manufactured the goods on their own as well as on job work basis. Those goods, which were manufactured on their own, were cleared on payment of duty and those on job work were cleared without payment of duty under Rule 57AC(5) of the Central Excise Rules, 1944/Rule 4(5)(i) of the CENVAT Credit Rules, 2001/2002 and after availing the benefit of Notification No.214/86-CE.

(3.) The Department proposed to disallow the credit taken on the quantity of inputs, which were used in the manufacture of job worked products on the ground that the benefit was not admissible to inputs used in the manufacture of exempted goods. The Tribunal, in the impugned order, followed the decision of the Larger Bench of the Tribunal in the case of Sterlite Industries (I) Ltd. Vs. Commissioner [(2005) 183 ELT 353 (Tri. - LB)]. The Tribunal further recorded that the Revenue impliedly conceded that the said decision of the Larger Bench covers the issue, yet contested the matter raising various contentions. Ultimately, the Tribunal held that the said decision of the Larger Bench was rendered on a similar set of facts, as, in that case also, the job worker had cleared a part of their production on payment of duty, which was independent production of their own.