ORDER
K.K. Bhatia, Member (T)
1. The appellants are the manufacturers of automobile Head Lamps and its accessories falling under sub-heading 8512.00.They are also availing modvat facility under Rules 57A and 57Q.They purchased one Glass Plunger (Die) and availed the modvat credit amounting to Rs.2,31,000/- on it in their RG 23C Part-II account on 10.10.97. This Die was sent to their Job Worker in terms of the provisions of Rule 57S(8). They were issued a show cause notice by the Dy. Commissioner of Central Excise, Jaipur calling upon them why the above amount of modvat credit should not be denied to them under Rule 57(3) and why a penalty should not be imposed on them. On considering the case of the party, the Dy. Commissioner vide his Order dt. 4.12.98 confirmed the duty of the above amount on them apart from imposing a penalty of the equal amount under Rule 57U(6). He further imposed a penalty of Rs.50,000/- on them under Rule 173Q.
2. The party filed an appeal and Commissioner (Appeals) vide his Order dt. 29.7.99, but for setting aside the penalty of Rs.50,000/- rejected the appeal of the party upholding the order passed by the Original authority.
3. The present appeal is against the above order of Commissioner (Appeals). The matter is listed today for hearing the Stay Petition filed by the party. I have heard Shri K.K. Anand, Advocate for the appellants and Shri K. Panchatcharm, JDR for the respondents. It is observed form the orders of the original as well as appellate authorities that the modvat credit of duty on the impugned die sent by the appellants to the job worker has been denied to them for violation of the provisions of Rule 57S(8). This rule as it stood at the relevant time is extracted below:
“(8) Notwithstanding anything contained in sub-rule (1), a manufacture may, with the permission of the Commissioner and subject to such terms and conditions and limitations as he may impose, remove the moulds and dies, without payment of duty, to a job-worker for the purpose of production of goods on his behalf and according to his specifications”
4. The modvat credit has been denied to the party only n the ground that in order to avail the facility under the above said rule, it is imperative that a manufacturer must send raw material also apart from sending the moulds and dies to be job worker. In this the reliance is placed on the judgment of the Hon’ble Supreme Court in the case of M/s. Prestige Engineering (India) Ltd.vs. CCE – 1994 (73) ELT 497 (S.C). It is held that as guide-lines laid down in this judgment with regards as to who can be considered as a “job worker” are not satisfied in the present case therefore, the facility under this rule cannot be extended to the appellants. The ld. Advocate for the appellants relied on the decision of the Tribunal in Final Order No.A/315/2000/NB(DB) dt. 5.4.2000 in the case of M/s. Monica Electronics vs. CCE New Delhi, in which the appeal of the party was allowed on the same grounds permitting them the facility under the said rule by setting aside the orders passed by the lower authorities. Shri K. Panchatcharm, JDR for the Revenue reiterates the findings arrived at by the lower authorities.
5. I have considered the submissions made before me. The extracts from the Rule 57-S (8) are already appended above. It can be seen from the above provisions that the moulds and dies could be removed by a manufacturer to his job worker for the production of goods on his behalf with the permission of the Commissioner and subject to such terms, conditions and limitations as he may impose. It is stayed before me that this power of the Commissioner is delegated to the Asst. Commissioner from whom the due permission was obtained by the appellants for sending the impugned die to the job worker. Therefore, if the Department had felt it necessary that in order to avil the facility under this rule, the raw material should also be supplied by the appellants to the job worker, the same should have been made as one of the conditions of the permission granted to them. The reliance placed on the judgment of the Hon’ble Supreme Court also prima facie appears mis-conceived since that decision is with reference to Notfn. No.118/75-CE and not in respect of the provisions under consideration.
6. In view of the above, the appellants have made out a priam facie case in their favour. They are therefore, allowed waiver of the entire amount of the duty and penalty confirmed on them. They are also granted the Stay against recovery of the same till the disposal of their appeal.
7. The appeal shall come up for hearing in its own turn for final disposal.
(Announced and dictated in the Court)