Excise Duty Demand on Clearance of Manufactured Casting on Job work basis without analysing SSI Exemption: CESTAT Directs Re-adjudication [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication on excise duty demand on clearance of manufactured casting job work basis without analyzing Small Scale Industry (SSI) exemption. 

Paras Founders & Engineers, the appellant assessee was engaged in the manufacture of casting on a work basis as well as on their own and one of the principal manufacturers Dyna Tex Enterprise had been supplying pig iron (raw material) to the assessee for the manufacture of castings as per drawings and designs given by the principal manufacturer and the assessee had undertaken the job work. 

The assessee appealed against the order passed by the Commissioner (Appeals) to confirm the demand for excise duty against the assessee. 

Nirav Shah, the counsel for the assessee contended that the job work was done under the procedure of Notification No 214/86 and also under Notification No 83/94, according to which the assessee was not liable to pay any duty on the job work goods. 

Also submitted that during the entire process, the principal manufacturer was liable to pay duty if at all any duty was payable and during the investigation the principal manufacturer had discharged the excise duty, thus no duty against the assessee shall be sustained. 

Ajay Kumar Samota, the counsel for the department relied on the decisions made by the lower authorities and contended that since the principal manufacturer had not accounted for the job work goods manufactured and supplied by them, the assessee was liable to pay excise duty on the casting manufactured by them. 

The Bench observed that as regards the goods which were other than job work and cleared by the assessee on their own without issuing invoices, there was a force in the argument of the assessee that after deducting the value of job work goods if the value remains within the threshold limit of the SSI exemption under Notification No 08/2003 then the same will not liable to duty and all these aspects are not verified by the department. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) remanded the matter back to the adjudicating authority for re-adjudication on the excise duty demand raised against the assessee. 

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