No Charge of Abatement for Evasion of Duty on basis of Job Work: CESTAT [Read Order]

Abatement - Job Work - GST - Taxscan

The Customs Excise & Service Tax Appellate Tribunal (CESTAT) of Ahmedabad held that the charge of abatement for evasion of duty on job work.

The appellant ( M/s. Rivaa Exports Ltd) supplied polyester PET films to M/s. MGM Metalizers Ltd. for metalizing on job work basis under the cover of Job work challan. Since M/s. Rivaa Exports Ltd.did not carry out any excisable activity, they weren’t registered with Central Excise. On the investigation it was found that M/s. MGM Metalizers Ltd. carrying out the metalizing process which amounts to manufacture and no excise duty was being paid by M/s. MGM Metalizers. Therefore, a Show Cause Notice issued to M/s. MGM Metalizers Ltd. for demanding Excise Duty and a penalty under Rule 26(1) of Central Excise Rules, 2002 was also imposed upon Sh. Mathew C. Abraham, who is the Accounts Manager of the Principle M/s. Rivaa Exports Ltd. from where the polyester PET films were sent for job work.

The Order was rendered by Judicial Member Ramesh Nair on an appeal given by M/s. Rivaa Exports Ltd.

The Bench also observed that the issue that whether metalizing is the amount to manufacture has been decided in favour of the assessee in the case of Metlex India Pvt. Ltd. Vs Commissioner of Central Excise, New Delhi, 2004 (165) E.L.T.129 by the Supreme Court and no contrary judgment of Hon’ble Supreme Court is available.

In the light of the judgement in Thermax Babcock & Wilcox Ltd. V/s C.C.E. Pune 2018 364 ELT 945 (Tri.-L.B.). held that metalizing of the film is not amount to manufacture and if there was any non-payment of duty by MGM neither M/s. Rivaa Export Ltd. nor its employee can be made responsible.

While allowing the appeal, Coram states that the charge of abatement for evasion of duty by MGM has no basis against the present appellant.

To Read the full text of the Order CLICK HERE