TANSI STRUCTURALS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS application seeks waiver of pre -deposit and stay of recovery in respect of an amount of duty of over Rs. 2.00 lakhs and an amount of penalty of Rs. 5,000/ -. The above demand of duty is on air -heater block assembly. Most of the raw materials required for this product were supplied by the principle manufacturer, namely, BHEL. The appellants, as job workers, made the above product and cleared to BHEL, without payment of duty, claiming the benefit of Notification No. 214/86 -C.E. They had used certain inputs of their own for the assembling. Taking this fact into account, the department took the view that what was done by the appellants was 'manufacture' of air -heater block assembly, not attracting the benefit of Notification No. 214/86 -C.E. ibid. Hence a demand was raised on them and a proposal for penalty was also made. The show cause notice issued in this behalf was contested by the assessee. Both the original authority and the first appellate authority upheld the demand of duty. They also imposed a penalty as above on the party.

(2.) LD . Chartered Accountant, submits that the benefit of the above Notification was not liable to be denied to the appellants for the sole reason that certain minor inputs of their own were used in the assembling of the product out of the raw materials supplied by BHEL. Support to this argument is drawn from the Tribunal's earlier remand Order itself. We have heard 1d. DR also.

(3.) A perusal of the remand Order shows that the 'Explanation' to Notification No. 214/86 was considered by the Bench and it was held that the definition of 'job work' set out in the Explanation did not prima facie preclude the use of some raw materials by the job worker that would be required to complete the job work entrusted to them. The remand Order seems to support the Chartered Accountant's argument. Therefore, we find prima facie case for the appellants and grant waiver of pre -deposit and stay of recovery in respect of the duty and penalty amounts.