C. E. A. No. 87 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : C. E. A. No. 87 of 2008 Date of Decision : November 28, 2008. Commissioner of Central Excise Commissionerate, Jalandhar .... Appellant Vs. M/s Kapson Industries Ltd., Jalandhar .... Respondent CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L. N. MITTAL * * * Present : Mr. Sanjeev Kaushik, Standing Counsel for the appellant. * * * ADARSH KUMAR GOEL, J. (Oral) : 1. The Revenue has preferred this appeal under Section 35(G) of the Central Excise Act, 1944 (for short, the Act) proposing to raise following substantial question of law :- “Whether liability under rule 57CC, 57AD of the erstwhile Central Excise Rules, 1944 or Rule 6(3) of Cenvat Credit Rules 2001/2002 is attracted in case of job worker availing exemption under Notification No.214/86-CE dated 25.03.1986 using common Cenvatable inputs both for manufacture of dutiable goods and exempted job work goods ?” 2. The Assessee is manufacturing Aluminum Castings and C. E. A. No. 87 of 2008 2 Electrical Stampings out of the Aluminum Ingots and C. R. Sheets. The Assessee avails facility of Cenvat credit on the inputs for the manufacture of final products. The Assessee was also receiving the job work charges from the principal manufacturer for the job work done. Show cause notice was issued, on the basis of audit objection, to the Assessee that inputs were being used for manufacture of finished goods as well as for job work and the Assessee was not maintaining any separate account. 3. After considering the reply of the Assessee, the Commissioner dropped the demand by recording the following finding :- “I have already observed at the outset that simultaneous manufacture of dutiable and exempted goods out of the common modvatted/cenvatted inputs is the first and foremost condition for demanding the said proposed amount for the contraventions of Rule 57CC and rule 57AD of the Rules and Rule 6 of the CCR 2001 & 2002 and unless this condition is satisfied, such an amount can neither be demanded nor recovered from the Noticee. Since the said excisable goods manufactured by the Noticee on job work basis out of the cenvatted inputs or partially processed inputs supplied by the principle raw material suppliers, which were alleged to be exempted goods for demanding the said amounts in the subject show cause notices, have been found to be not exempted goods but dutiable excisable goods, I find that the demand of Rs.2,85,68,551/- (Rs.1,74,70,056/- + Rs.17,72,671/- + Rs.45,64,494/- + Rs.47,61,330/-) relating to the said four show cause notices for the C. E. A. No. 87 of 2008 3 contravention of Rule 57CC & Rule 57AD of the Rules and rule 6 of the CCR, 2001 & 2002 are not primarily sustainable on merit.” 4. The Revenue preferred appeal before the Tribunal. The Tribunal affirmed the finding of the Commissioner. 5. We have heard learned counsel for the appellant. 6. In view of concurrent finding recorded by the authorities that there was no simultaneous manufacture of dutiable and exempted goods out of the common modvatted/cenvatted inputs, there was no violation involved. 7. In view of above, no substantial question of law arises for consideration. 8. The appeal is accordingly dismissed. (ADARSH KUMAR GOEL) JUDGE November 28, 2008 ( L. N. MITTAL ) monika JUDGE