2026-VIL-1262-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Exemption from Central Excise Duty on Job-Work, Discharge of service tax on job charges - Appellant received cast articles from principal manufacturers like Mahindra & Mahindra and Action Construction Equipment Ltd, performed job-work and sent back goods to principal manufacturers claiming exemption on gear-box housing under Notification No.06/2006-CE dated 01.03.2006 and Entry No.340 of Notification No.12/2012-CE - Whether appellant is entitled to exemption under the said notifications - HELD - The exemption notifications provide that parts used within the factory of production for manufacture of goods of Heading 8701 are exempt from duty. Three conditions must be satisfied: goods should be parts, should be used in factory of production, and should be used in manufacture of tractors. The statutory definition does not employ the word generated or imported and hence the condition that only scrap generated in the factory of production is entitled to exemption is unwarranted and unsustainable - The intention behind the grant of exemption was to prevent duty being paid at two stages. If benefit is not given it would mean double payment of duty which is contrary to the law laid down by the Constitution Bench. Appellant has been paying service tax on job work done as service and Revenue has not raised objection. Revenue cannot charge both service tax as well as central excise duty on the same item of work and consideration – Further, extended period cannot be invoked as appellant has been regularly filing returns and no objection was raised - The appellant is eligible for exemption and extended period cannot be invoked - Both the appeals are allowed
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