Per J.H. Joglekar :

The two appeals involve a common issue. They were disposed of by the Collector under a common order. These two orders are being dealt with by this common order.

2. The appellants manufactured enamelled copper wire. Copper Wire was obtained by them from other manufacturers who were operating under the cover of Notification No. 175/86. The jurisdictional officers studied the transactions between the present appellants and the suppliers. It was found that the present appellants were purchasing copper ingots, were getting such ingots converted into wire rods; then selling the wire rods to other manufacturers and purchasing from them the resultant bare copper wire. The two show cause notices issued made the allegation that in effect the appellants got the wire rods converted into bare copper wires on job work basis; that the convertors were not manufacturers in their own merit; that they were, therefore, not capable of availing of the benefit of the cited notification; and as a result the higher notional credit taken by the appellants under Rule 57-B of the Central Excise Rules, 1944 was wrongly taken. The demands for duty short levied as made in the show cause notices were confirmed in both cases by the jurisdictional Asstt. Collector. The Collector (Appeals) having upheld the finding in the lower orders, the present appeal is before us.

3. We have heard Shri K.K. Anand, Advocate for the appellants. Apart from raising the issues as to the propriety and validity to the addenda to the show cause notices, Shri Anand maintained that the transactions between themselves and manufacturers who converted the wire rods into bare copper wires were as between two independent manufacturers. It was his claim that the department has erred in holding that manufacturers of copper wire were merely convertors and therefore the benefit of the notification as well as the rule was wrongly taken. His further claim that even it is to be assumed that the manufacturers were merely convertors operating on the job work basis, the benefit could still accrue. Citing the judgement of the Tribunal in the case of Marudhara Conductors Vs. CCE, Jaipur reported at 1997 (94) ELT 221, he stated that in this case the denial of higher notional credit was set aside by the Tribunal. In this judgement it was held that modvat credit could be taken in respect of goods received from job worker on job work basis. He relied on the Tribunal's judgement in the case of Vimla Rolling Mills Pvt. Ltd. in which it has been held that it was the principal manufacturer's option whether resort could be had to the procedure under Rule 57-F (2) or not. Where the rule was not brought into picture, the job worker could take the credit of duty paid on inputs received by him from the final manufacturer and could clear the final products on payment of duty thereon. He also relied upon the Tribunal judgement in the case of National Workshop and Foundaries Vs. CCE reported at 1993 (47) ECR 68 in which it was held that even where the inputs were received by job worker from the principal manufacturer, modvat was available to the job worker provided the principal manufacturer had not taken modvat. Shri K.K. Anand stressed that in all the three situations, the Tribunal held the job worker to be a manufacturer capable of taking credit even where the goods were received specifically for job work. Applying the ratio of the judgement, he claimed that the demands were wrongly confirmed.

4. Shri D.S. Negi, ld. SDR reiterated the Collector's order.

5. We have carefully considered the submissions made by both sides and have also examined the case law cited.

6. The basic thrust of the Revenue's case was that the transfer of goods between the present appellants and the convertors of rods into bare wire were not on principal to principal basis but was in the nature of job work. On this ground, it was claimed that the job worker could not take the benefit of notification 175/86 in so far as the