ORDER
Jeet Ram Kait, Member (T)
1. Both the appeals are filed by the Revenue against the order in Appeal No. 32 & 33/98-MDU dt. 12.5.1998 by which the Commissioner (Appeals) has held that the Respondents are not liable to pay additional duty of excise in respect of the goods manufactured by them and consumed captively and cleared inasmuch as there was no loss of Revenue to the Government whether the additional duty of excise is paid at the time of clearance of Grey tyre cord fabrics captively consumed or at the time of clearance of the dipped tyre cord warp sheets. He also held that law does not authorise for the levy of duty second time on the product falling under the same chapter sub headings. Similarly, in respect of job works as regards to clearance of the Grey Tyre Cord fabrics which are captively consumed in the manufacture of Tyrecord warp sheet and which were cleared under the provisions of Rule 57F(3) of the Central Excise Rules, 1944 read with Notification No. 214/86-CE dt. 25.3.1986, he held that duty liability in such cases rested with the original manufacturer and not with the job worker. Ld. Commissioner had also relied on the Board’s circular No. 306/2297-CX.6 dt. 20.3.1997 wherein it was clarified that the duty liability was required to be discharged by the manufacturer and not by the job workers.
2. Appearing on behalf of the Revenue Ld. SDR Smt. Bhaghya Devi submitted that the appellants manufacture Grey tyrecord fabric falling under Chapter sub heading 59.02 for their own consumption and also on job work basis. The Grey Tyrecord fabric is captively consumed in the manufacture of dipped grey tyre cord fabrics falling under the same heading 59.02; for manufacture on job work basis they received Nylon yarn/Polyster yarn by availing the provisions of Rule 57F(3) read with Notification No. 214/86-CE dt. 25.3.1986. She further submitted that when grey tyrecord fabric is consumed, additional duty of excise is payable as Notification No. 67/95 exempts only the basic excise duty. As regards the goods cleared under Notification No. 214/86 it exempts basic excise duty only and the additional duty of central excise is leviable. She also submitted that.-
(i) even for captively consumed goods, additional duty of excise is payable on grey tyrecord fabric, since only basic excise had been paid on the final porduct i.e. dipped tyrecord fabric at the time of clearance from the factory. She also submitted that although grey tyrecord fabrics fall under the same headings yet duty is leviable on grey tyre cord fabrcis and levy of such grey tyre cord fabrics would not amount to double taxation.
(ii) In the case of goods manufactured on job work basis, the duty liability to pay duty would lie only on the original manufacturer and not on the job worker by applying the Board’s circular No. 306/22/97 CX-6 dt.20.3.1997.
She therefore pleads that the impugned order is not correct in holding that additional duty of excise is not payable on grey tyre cord fabrics as the grey tyre cord fabrics and dipped tyre cord warp sheet on the ground that both fall under the same sub heading 59.02 and also levy of duty on grey tyrecord fabrics would amount to double taxation. She invited out attention to the Apex Court Judgment rendered in the case of Laminated Packaging (P) Ltd. v. CCE wherein it has been held that there can be manufacture even if inputs of final products are falling under the same tariff heading, if different identifiable commercially known product comes into existence. Grey tyre cord fabrics are marketable as such and therefore duty shall have to be paid at every point of manufacture unless exempted specifically under the Central Excise Tariff Act, 1985. The fact that duty is being paid at subsequent stage i.e. to say at the time of dipped tyre cord fabric stage, will not mean that the duty liability on the grey tyre cord fabrics which is distinct marketable product has been discharged. It is only in case where marketable product does not emerge the plea of duty on the final product would be allowed otherwise the duty has to be paid at every stage. As for the goods removed on job work basis, the assessee should have paid the additional duty on the goods namely grey tyre cord fabrics before they were removed to the original manufactures inasmuch as the Notification No. 214/86 does not exempt additional duty of excise and duty is payable on the goods manufactured on job work basis. In this connection, she invited out attention to the Judgment rendered by CEGAT, SRB Bangalore in the matter of Gokak Mills v. CCE, Bangalore wherein it has been held that additional duty of excise is required to be paid by job workers on Nylon Tyre Cord fabrics manufactured from Nylon yarn supplied by tyre companies on job work basis and to be returned to them under Central Excise Rules 57F(3) and 57F(4). And they are not exempted from additional duty of central excise under Notification No. 214/86 CE as the notification issued under Rule 8(1) of the Rules ibid exempts only basic excise duty and does not cover additional duty of central Excise leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957, as has been held by the Apex Court in the case of UOI v. Modi Rubber Ltd. . She also submitted that the same would be the case in respect of goods captively consumed grey tyre cord fabrics used in the manufacture of dipped tyre cord fabrics. The manufacturer is entitled to avail credit payable on the grey tyre cord fabrics to be adjusted against the final product dipped tyre cord fabrics. Therefore additional duty of central Excise is payable on the grey tyre cord fabrics which is captively consumed and also on the clearance of the products manufactured by the job workers. She also submits that the impugned order No. 32 & 33/98 dt. 12.5.1998 may be set aside and the order in original of the lower authority may be restored.
3. Appearing on behalf of the respondent (assessee) authorised representative Shri S.S. Thakur submits that they have two streams i.e. (1) product they manufacture on their own behalf as well as they manufacture goods for others. They manufacture grey tyre cord fabrics used captively as intermediate product for the manufacture of dipped tyre cord fabrics. They also received Nylon filament yarn/Polyester yarn and manufacture the grey tyre cord fabrics as well as dipped tyre cord fabrics on job work basis and the raw materials namely modvated inputs are received by appellants after following the procedure prescribed under Rule 57F(3) and F(4) of the CE Rules and returned the goods after carrying out necessary processes to the original manufacturer. The Ld. Consultant fairly conceded that in respect of first consumer that is where grey tyre cord fabrics, the intermediate products are captively consumed in the manufacture of dipped tyre cord fabrics. They are required to pay an additional duty of Central Excise as the notification No. 67/95 did not exempt the goods from the additional duty of Central Excise. He also submits that this additional duty of central excise has already been paid by them in respect of the grey tyre cord fabrics which has been captively consumed in the manufacture of dipped tyre cord fabrics and have also taken modvat credit. As regards the goods manufactured by them on job work basis the Ld. Consultant submits that they are not required to pay any duty in view of the Judgment rendered by the CEGAT in the case of M. Tex & D.K. Processors (P) Ltd v. CCE, Jaipur reported in 2001 (136) ELT 73 (T) : 2001 (94) ECR 353 (T). The above Judgment of the CEGAT has been upheld by the Hon’ble Apex Court by dismissing the appeal filed by the Revenue . The Apex Court had decided the matter against the Tribunal (Sic Revenue) by hearing the Attorney General on the circular of the CBEC No. 306/22/97-CX dt. 20th March, 1997. He further submitted that the Ld. Attorney General after examining the same had conceded that the circular covers the facts of these cases against the Revenue and the appeals filed by the Revenue are therefore dismissed by the Hon’ble Apex Court. The Appellate Tribunal in its impugned order by majority order has held that the appellants as job workers who received the inputs (fabrics from the principal manufacturer under challan issued under Rule 57F(4) and returned the said goods after carrying out the processes and return it to the principal manufacturer on job work basis were not liable to pay duty on the processed fabrics so returned. Therefore, he submitted that basic excise duty as well as additional duty of central excise has been paid by the original manufacturers at the time of clearance of goods, they were, therefore, not required to pay additional duty of central Excise as demanded by the Revenue.
4. We have considered rival submissions and we are of the considered opinion that no duty is required to be paid by the job workers in view of the Judgment rendered by the Tribunal in the case of M. Tex & D.K. Processors (P) Ltd. v. CCE reported in 2001 (136) ELT 73 (TRI. DEL) : 2001 (94) ECR 353 (T) which has been confirmed by the Apex Court . We find that the judgements rendered in the case of Gokak Mills v. CCE, Bangalore vide final order No. 139/01 dt. 6.2.2001 which was the law prior to the judgements rendered by the Apex Court which has confirmed the decision rendered by the Tribunal in the case of M. Tex & D.K. Processors (P) Ltd. dt 3.10.2002 and therefore the decision rendered by the Bangalore Bench is distinguishable. We, therefore, confirm the additional duty of excise on the intermediate product namely grey tyre cord fabric which has gone in to the manufacture of dipped tyre cord fabrics, which is captively consumed and to this extent the order of the Ld. Commissioner (Appeals) is not acceptable and is modified. As regards the duty to be paid by the job workers, when the additional duty of central excise has been paid by the original manufacturers at the time of final clearance, no additional duty of central excise is liable to be paid by the job workers in view of the judgements rendered by the Tribunal in the case of M. Tex & D.K. Processors (P) Ltd. (supra) which has been confirmed by the Apex Court vide their final order dt. 3.10.2002 . In fact, if any duty has been paid by the assessee on demand on this account then the same shall be liable for refund as per law. As regards the payment of duty on the intermediate product captively consumed in the manufacture of dipped tyre cord fabrics the authorised representative conceded and the same is payable as reported to have been paid by them and they have also taken modvat credit. The impugned order is, therefore, modified in the above terms.
(Order dictated and pronounced in open court)