Full Judgment
Mrs. Archana Wadhwa, J.
1. Both the appeals are disposed of by a common order as they arise out of the same impugned order of the Commissioner (Appeals). I have heard Shri Ravinder Singh, Consultant appearing for the appellant and Shri BB Sharma, Ld. Departmental Representative, appearing for Revenue.
2. As per facts on record, M/s. GSP Electronics are engaged in manufacture of transformers, coils and degaussing coils falling under Chapter 85 of the Central Excise Tariff Act, 1985. They were sending their raw-material, i.e., copper rods to their job workers M/s. S.H. Haryana Wires Ltd. for drawing and enamelling of the same in terms of Rule 4(5)(a) of CENVAT Credit Rules, 2001/2002 under the cover of challans and the job worker was returning the goods after completion of the job work to the appellant. As the job worker has used paint for enamelling of the goods, and charged the job charges including the cost of the enamel, they were paying duty on the said goods and the appellant was availing the credit of the duty paid by the job worker.
3. The Revenues contention is that the job worker should not have paid duty on the enamelled wires and as such the appellant is not entitled to avail the credit of the duty paid by the job worker. The Commissioner (Appeals) has also held that if the job worker has chosen to pay the duty on the processed inputs, he should have paid full duty in terms of the formula laid down by the Hon'ble Supreme Court in the case of Ujgar Prints Vs. Union of India and Others [1989 (039) E.L.T. 493 - SC]. Accordingly, he has held that the duty paid by the job worker cannot be held to be duty paid by them and as such the appellant is not entitled to avail the credit of the same.
4. After appreciating the submissions made by both the sides, I find that admittedly, the job worker has discharged the duty burden on the value consisting of job charges and cost of enamel. If the Revenue is of the view that such discharging of duty by the job worker is on the lower side, they were free to raise the duty against the job worker. However, the issue in the present case is not related to same and the only law point required to be decided is as to whether the duty paid by the job worker is available to the appellant or not, as credit.
5. The Tribunal in the case of Treadsdirect Ltd. Vs. C.C.E., Calicut [2012 (286) E.L.T. 583 (Tri. - Bang.)] has observed that the question of assessable value at the job worker cannot be charged at the end of the manufacturer of the final product and the manufacturer of final product would be entitled to the CENVAT credit of duty paid by the job worker. To the similar effect is the Tribunals decisions in the cases of SPIC (HCD) Ltd. Vs. C.C.E., Chennai-I [2006 (201) E.L.T. 386 (Tri. Chennai)], Collector of C.Ex., Vadodara Vs. Anupam Engineering Works [1999 (113) E.L.T. 497 (Tribunal) and Crocodile (India) Pvt. Ltd. Vs. C.C.E., Salem [2006 (205) E.L.T. 419 (Tri. - Chennai)] .
6. I also find that the Hon'ble High Court of Punjab and Haryana in the case of C.C.E., Chandigarh Vs. Ranbaxy Labs Ltd. [2006 (203) E.L.T. 213 (P and H)] has held that the credit of duty paid by the job worker even though not required to be paid is available to the principal manufacturer. To the similar effect is the decision of the Hon'ble High Court of Mumbai in the case of C.C.E., Goa Vs. Nestle India Ltd. [2012 (275) E.L.T. 49 (Bom.)].
7. By following the ratio of the law declared in the above decisions, I hold that the appellant was entitled to the credit of duty paid by the job worker. Accordingly, the impugned order confirming the demand and imposing penalties on both the appellants is set aside and the appeals are allowed with the consequential relief to the appellants.