Manufacture on Job Work Basis - Board seeks Opinion from Field Formations
FIELD formations have represented to the Board stating that as per the present provisions, in case a manufacturer receives certain inputs for job work from another manufacturer and produces a final product using other inputs from his ownership, provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are applied in such cases in respect of final products manufactured by a job worker availing exemption under Notification No. dated 25.03.1986.
It was further stated that the above provisions do not appear to be reasonable as goods manufactured by job worker suffers duty at the hands of the principal manufacturer. Therefore, it has been recommended that the benefit of Rule 6(6) of the CENVAT Credit Rules, 2004, may be extended for clearances under the said job work notification.
In view of this reference from the field, Board desires to know the practice followed with respect to such clearances in the respective Zones and solicits considered opinion/views on the issue supported by legal provisions, judicial pronouncements etc along with details of any SCN/appeal pending on this issue.
It appears that the officers in the field have worked overtime to defeat the very purpose and premise of Notification 214/86-CE as amended. Such a devious interpretation by some officers in the field has probably resulted in enormous paper work for a certain section of officers in the field (as well as the assessees), who would have otherwise lost their sanity in mindless litigations on this issue but for their steadfast approach to rule of law, resulting in this appeal to the Board to find a workable solution to avoid unwarranted paper work.
But isn't the issue settled in favour of the assessee in the following among other cases?
1. STERLITE INDUSTRIES -
2. ESCORTS LTD -
CBEC Letter F. No. 267/12/2010-CX.8, Dated: February 18, 2010