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Echjay Forgings Pvt. Ltd V/S Commissioner of Central Exicse

    Appeal No. E/85311/16 E/CO-91047/16 (Arising out of Order-in- Appeal No. CD/8/RGD/2016, Dated: 26-11-2015 Passed by the Commissioner (Appeals), Central Excise, Mumbai) and Order No. A/90372-90373/17/SMB

    Decided On, 15 September 2017

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER

    For Petitioner: Mihir Mehta, Advocate And For Respondents: Deepak S. Chavan, Superintendent (AR)



Judgment Text


1. The appellant is engaged in the manufacture of forging for their own clearance as well as on job work basis. The case of the department is that forging process carried out on job work for principle is exempted service. They are availing Cenvatcredit on input and input service, which is used for manufacture of dutiable forge as well as for job work therefore in terms of Rule 6(3)(i) they are required to reverse 6% of the value of such exempted service. Shri. Mihir Mehta, Ld. Counsel for the appellant submits that the processing of forging for the principle is activity which amount to manufacture therefore it is not exempted service as manufacture activity is excluded from the purview of the service therefore entire basis of the demand under Rule 6(3) is incorrect. He also submits that demand is time bar there is no suppression of fact. He submits that even if it is assumed that Rule 6(3) is applicable job work activity which is carried out under Notification No. 214/86-CE is not exempted activity, therefore Rule 6(3) is not applicable.

2. On the other hand, Shri. Deepak S. Chavan, Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

3. I have carefully considered the submissions made by both sides and perused the record. I find that entire basis of demand under Rule 6(3) is that the appellant has provided exempted service i.e. processing of forging on behalf of the principle on job work basis. This allegation is absolutely incorrect on the face of the record. The activity of making forging is clearly manufacturing activity. Moreover, appellant by the same activity manufacture on their own account and discharging excise duty, which is not under dispute by the Revenue. Even if it is presumed that it is exempted manufacturing activity, since the job work is done under Notification No. 214/86-CE duty is very much payable by the principle on the overall product therefore goods processed by the job worker cannot be treated as exempted. Therefore appellant is n

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either providing any exempted service nor any manufacture which is exempted. Therefore Rule 6 is not applicable in the fact of the present case. Accordingly impugned order is set aside and appeal is allowed. CO stands disposed of.
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