Judgment:
1. These are appeals filed with reference to a common order-in-appeal passed by the Commissioner (Appeals), New Delhi dated 12-9-1995.
2. Ld. Counsel submitted that the appellants were engaged in the manufacture of Hot Rolled untrimmed sheets/circles of copper/copper alloys falling under heading 7409.20 of the Central Excise Tariff. They were holding Central Excise Registration as required under Rule 174 of Central Excise Rules, 1944. Since product was liable to duty @ Rs. 1400/- per ton as per notification no. 178/88-C.E., dated 13-5-1988, (provided no benefit under rule 56A/57A has been taken). They were clearing the same on payment of duty accordingly. That vide Finance Bill, 1994 introduced on 28-2-1994 the notification no. 178/88, dated 13-5-1988 was withdrawn and the benefit of notification no. 1 /93 to the products falling under heading 7409.00 was extended, granting exemption upto Rs. 30 lakhs.
Therefore, as advised by the local staff in a meeting held on 15-3-1994, the Registration Certificates were surrendered and the appellants became entitled to an exemption upto Rs. 30 Lakhs in the month of March, 1994 and again in the next year April, 1994 to March, 1995.
That this position was even confirmed by the Principal Collector vide his C. No. IV(16)414/CE/94/7381A, dated 3-10-1994 relevant extracts from which are reproduced below : - What is the procedure of getting the brass gullies converted into untrimmed circles on job basis from hot rollers by the manufacturers of trimmed circles/cold rolled sheets not facility of hot rolling in their units when their sales is below Rs. 30 Lacs? Such manufacturers of trimmed brass circles/cold rolled sheets can get their billets/gullies hot rolled into untrimmed circles/sheets on job work basis as per provision of notification nos. 83/94 and 84/94, dated 11-4-1994 while availing exemption under notification no. 1 /93-C.E., dated 28-2-1993 on clearances of their final product i.e. trimmed circles or cold rolled sheets as the case may be.
A point was raised by the Hot Rollers Association that which of their product i.e. hot rolled circles/sheets are not chargeable to any Central Excise duty? The Chairman clarified that the product job rolled under Rule 57F(3), notification no. 214/86, dated 25-3-1986 and 83/94-C.E., dated 11-4-1994, are not to be charged to Central Excise duty in the hands of job worker provided proper procedure is adopted as provided in the Central Excise Rules/relevant notifications." That consequent upon rescinding of notification no. 176/88-C.E. by 64/94, dated 1-3-1994 the word 'untrimmed' was removed from Chapter 74.
As per Note 1(g) of Chapter 74, sheets, are flat surface products of solid Rectangular Cross Section with or without rounded corners, the 2 sides being straight of equal length and parallel and of a uniform thickness.
That untrimmed circles do not conform to this definition, and are not 'goods' as known in the market as they are not chargeable to duty of excise in this condition.
That the fact that appellants were engaged in hot rolling brass gullies/billets into untrimmed brass circles on job work basis following the procedure under Rule 57F(2)/57F(3) was not in dispute.
That these untrimmed circles were subjected to various other processes like trimming, acid bath, cold rolling, annealing, washing etc., before they attained the shape of final excisable product as defined in the tariff; and become marketable only after these processes have been carried out.
That duty liability, if any, was upon manufacturers in terms of notification no. 214/86, dated 25-3-1986 and 83/94, dated 11-4-1994.
That as per clarification (supra) given by the department, job worker i.e. hot rollers were not required to hold central excise registration and to pay duty.
That in any eventuality it was not correct to deny them exemption of Rs 30 Lakhs for the relevant periods and the demand of duty has been wrongly confirmed. Accordingly, the order-in-original merited its vacation.
3. The ld. Counsel further emphasised that untrimmed brass circles hot rolled manufactured by them out of billets/gullies by rolling are not finished marketable products but are merely used for production of the final products namely, the trimmed circles or cold rolled sheets. He also emphasised that the Commissioner has erred in holding that the appellants were engaged in hot rolling of the products which were received under the then Rule 57F(2) of the Central Excise Rules, 1944 on proper serial numbered challans duly authenticated by the Central Excise officers because the appellants were not required to follow any procedure under Rule 57A and 57F(2) or even under Notification No.214/86-C.E., dated 25-3-1986 since they were only job workers and hence it was for the suppliers of the materials to file the necessary documents before the Central Excise officers.
Ld. Counsel further stated that Ld. Commissioner's (Appeals) observations regarding Addl. Commissioner's view with reference to Notification No. 1/93-C.E. is also misplaced. It is a settled law that it was an option of the appellants either to claim modvat and work under Notification No. 1/93-C.E. or under para a(i) or para a(ii) of para 1 of Notification No. 1/93-C.E., dated 28-2-1993. It was their grievance that the authorities below have fixed liability, if any, on the wrong persons because liability if any, is to be discharged by the supplier of the appellants and cannot be fastened to the appellants who are merely job workers.
He reiterated and emphasied the status of the appellants that the material is in untrimmed condition in an unwrought form not satisfying the condition Note 1(a) to Chapter 74 so as to get classified in the Central Excise Tariff and even if it is presumed that these are excisable benefit of Notification No. 1 /93-C.E. to these product cannot be denied.
4. The ld. DR drew attention to the order-in-original and order-in-appeal particularly to the finding portions and emphasised that the liability to pay duty to manufacture of goods is on the persons who manufacture the goods and no exemption is available to the job workers who had manufactured these items. Since in these cases, the job workers were not entitled to exemption under Notification No. 1/93 or any other notification, they were required to clear the goods manufactured by them only on payment of duty.
5. That sheets and circles are excisable products is evident from the fact that they are normally bought from the market as such; And whether they are manufactured on job work or otherwise is immaterial.
Notification No. 178/88, dated 13-5-1988 specifically refers to untrimmed circles. The fact that this notification was subsequently rescinded by Notification No. 64/94-C.E., dated 1-3-1994 does not affect excisability. It only has, a bearing on the availability or otherwise of exemption and in fact are covered by heading 74.09 of the CET and the exemption in terms of Notification 214/86 could be claimed subject to the satisfaction of the conditions mentioned therein.
6. Ld. Commr. (Appeals) has rightly referred to Notification No. 178/88 which specifically mentions heading 74.09 in respect of untrimmed sheets and circles and prescribed effective rate of duty.
7. Furthermore as Addl. Collr. has noticed that the supplier of billets working under Notification No. 1/93 and availed full exemption of Rs. 30 lac in respect of clearances of final product. Thus after filing intimations under Rule 57F(2), the suppliers had not switched over, to the payment of duty in terms of Clause a(i) to para 1 of Notification No. 1/93 and that she has rightly held that there is neither valid document for availing the facility under Rule 57F(2) nor claimed under exemption under Notification No. 214/86 and she has correctly held that duty liability was in respect of final product manufactured by them and not in respect of the goods manufactured by the appellants.
8. Ld. DR cited case law in support of the department's contention that (a) the demand of duty could be made only from the manufacturer (b) granting of exemption depends upon various conditions precedents as well as procedure which is required to be followed, if such exemption is sought (c) simultaneous availment of modvat credit and SSI exemption on the same goods is not permissible and (d) Doctrine of estoppel is inapplicable to taxation matters; And in this respect referred to : - (ii) Kalsi Tyres (Chandigarh) v. CCE - 1986 (26) E.L.T. 631 (Tribunal) 9. Ld. Counsel in reply drew attention to Notification No. 214/86 and in particular to the salient features mentioned therein which clearly states inter alia that the job worker is exempted from payment of duty and it is the principal manufacturer who is responsible for using the goods subjected to job work operation in the manufacture of final products.
10. He also emphasised that the product even if mentioned in the tariff cannot be considered as excisable unless marketable and in this respect, he relied on the following citations : 3. Indian Textile Paper Tube Co. v. CCE - 1995 (77) E.L.T. 372 (Tribunal) (He also cited Notification No. 214/86 and stated that job workers challans need not be authenticated as per CBEC Circular No.60/60/94-CX., dated 19-9-1994 reported in 1994 (73) E.L.T. 56.
It was also his grievance that Stereotyped show cause notices have been issued to all the appellants and a common order has been passed without noticing the difference in the facts of different parties. It was also his submission that Notifications are a part of Tariff and have statutory force as held in the case of C.C.E. v. Parle Exports. The salient feature of the exemption scheme indicated under Notification No. 214/86 were required to be taken into account and therefore, the liability, if any, could not be laid upon the appellants.
11. We have considered the above submissions. We observe the ld. DR's contention that untrimmed sheets and circles of copper/copper alloys are excisable products falling under heading 74.20 of CET is correct.
In fact, in their appeal memo, the appellants themselves describe their products as classifiable under the above heading of the CET.12. Ld. Counsel's contention that untrimmed circles/sheets are not marketable commodity is not acceptable inasmuch as beyond making an assertion to this effect no material has been produced in support of the above contention.
13. The Central Excise schedule is a schedule describing the goods which are excisable therefore, in the normal course, an item mentioned therein is to be treated as excisable unless proved otherwise i.e. to say in case of mention of the item in the tariff, there is an initial presumption in favour of it being excisable product but it is a rebuttable presumption and therefore, it was for the party claiming it to be non-excisable, in spite of its mention in the tariff, to discharge its burden.
14. Further, even otherwise, the untrimmed circles could be either manufactured on job work or purchased and utilised for the manufacture of trimmed circles and subsequently in the manufacture of utensils etc.
The notifications cited and relied upon by both the sides in favour of their respective arguments themselves provide exemption to excisable goods only (in fact there is no need for issuing an exemption notification for an item which is not excisable). The appellants have themselves accepted that they were claiming the benefit of exemption under Notification No. 178/88 till it was in force and clearing untrimmed circles on payment of duty accordingly. The case law cited by the ld. Counsel therefore, does not advance their cause in view of the above facts and circumstances of the case.
15. Ld. Counsel is, correct in pointing out that Notification No.178/88 was rescinded by Notification No. 64/94, dated 1-3-1994 but this does not mean that the goods which were previously excisable became non-excisable; And it could only be taken to mean that the goods which were governed by Notification No. 178/88 were no longer exempted (unless covered under some other notification).
16. Ld. Counsel is correct in pointing out that Notification No. 59/94 was extended to cover heading 74.09, in which articles and sheets fall, but this benefit became available only w.e.f. 1-3-1994. He was therefore right in his argument that since the period involved in respect of different parties was different, the Commissioner (Appeals) and Addl. Collector should have taken into account the differences in period and passed order separately.
17. Ld. Counsel is also correct in pointing out that Notification No.134/94, dated (sic.) levied duty again on untrimmed circles w.e.f. the same date. However, Notification No. 214/86, dated 25-3-1986 exempted job work from payment of duty and passed on the liability on the supplier of the raw material or semi-finished goods.
18. Ld. DR is correct in pointing out that benefit of exemption can only be claimed subject to fulfilment of the conditions prescribed therein including the procedure. Notification No. 214/86 prescribes (in para 2 thereof), the responsibility of the supplier of raw material or semi-finished goods and also lays down that the procedure for movement of the goods shall be the same as prescribed under Rule 57F(2).
Therefore, the ld. Counsel is correct in pointing out that it is for the supplier to comply, and the department to verify, whether the conditions mentioned in para 2 had been duly fulfilled. As far as procedure is concerned, Commissioner (Appeals) order itself indicates that the goods were received under Rule 57F(2). The appellants also referred to movement of goods under gate pass and case of challans.
19. It is also noticed that the ld. Counsel has correctly drawn attention towards the minutes of 4th meeting of the Regional Advisory Committee for the year 1991 held at Bombay-Ill, dated 20-1-1991.
20. Furthermore, if an assessee firm was a small scale manufacturer and therefore, governed by the SSI Notification and at the same time some items manufactured by it were entitled to benefit of some other notification the same could not be denied unless it was specifically so stated in either one or both of the notifications. Thus e.g. some notifications themselves indicate that benefit thereof shall not be available if the assessee has already availed of the benefit under Rule 56A and 57A (as for example Notification No. 134/94). Since there is no such stipulation in the Notification 214/86 the benefit thereof could not be denied to a person enjoying SSI benefit.
21. It is also significant that Notification 1/93 is an SSI notification which specifically includes certain headings and excludes others. Therefore, generalisation is not possible. In the circumstances, the benefit under Notification 214/86 could not be denied to the appellants from the period it came into force and they had opted for the same subject to the fulfilment of conditions and the procedure prescribed therein. The duty liability, if any, which may arise in case of non-fulfilment of the conditions prescribed in para 2 would lie on the supplier(s) of the raw material or semi-finished goods as the responsibility has been explicitly cast on him as a principal manufacturer.
22. Ld. DR is correct in pointing out that in normal course, the responsibility under Excise Law is on the manufacturer (incl. job workers) but once the Government has chosen to depart from this principle explicitly and made provisions to take care of the resultant situation by making a specific provision in the notification no. 214/86 it is not the case law cited by the Ld. DR but the plain language of the notification which will have to be taken note of. The Ld. Counsel therefore, is correct in pointing out that in view of the difference in periods and facts, each case will have to be examined on its own merits. In view of the above position, the impugned order are set aside and the matter is remanded to the adjudicating authority for de novo consideration in the light of the above observations and the law.