Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs M.R.F. Limited on 13 August, 1997
Equivalent citations: 1999(114)ELT157(TRI-CHENNAI)
ORDER
V.P. Gulati, Vice President
1. These appeals involve a common issue and are, therefore, taken up together for disposal. The learned lower appellate authority under the impugned order has allowed the respondents the benefit of Modvat credit in respect of the duty which came to be subsequently demanded from the respondents on the goods which were removed to their other factories. The lower appellate authority remanded the matter for consideration of the grant of the Modvat credit in the following terms :
"4.1 have carefully gone through the records of the case. As rightly contended by the appellants while (sic) allegation in the show cause notice's was that the appellants had not received the input dip solution, resorcinol, formaldehyde as such and have also not declared them as inputs in terms of Rule 57G of Central Excise Rules, 1944 the impugned orders have proceeded on a different field. It has been held that the certificates issued under Rule 57 are not valid documents in the circumstances of the case and that the dip solution is not an input in terms of Rule 57A and that the job worker had used the three inputs viz. Resorcinol, formaldehyde and VP latex after availing credit to manufacture dip solution and used the same for processing and therefore dip solution is not an item used as input by the job worker, nor has it been received as such in the appellants' factory to enable them to avail the Modvat credit. Clearly these findings are totally beyond the scope of the show cause notice. The orders are therefore set aside and the appeals are remanded to the lower authority for consideration of the following questions and appropriate decision :-
(i) whether in the circumstances of the case, appellants can be said to have complied with the provisions of Rule 57G read with notification issued thereunder; and
(ii) whether the allegation that dip solution has not been received by the appellants as such would survive when Rule 57] provides that the input need not be received as such but can be in the form of intermediate goods duly accompanied by authentic document evidencing payment of duty on the inputs;
In this context it is ordered that the certificates issued for payment of duty on resorcinol, formaldehyde and dip solution are to be considered as valid documents in terms of Rule 57E of Central Excise Rules, 1944 because initial clearance of these goods without payment of duty and subsequent payment of appropriate duty, by debiting the RG 23A Part-II account, is to be construed as variation of duty in terms of Rule 57.
2. It is seen that the learned lower appellate authority has left the issue open for consideration for the purpose of grant of Modvat credit in the context of Rule 57] read with Rule 57E. A reading of the learned lower authority's order shows that in case the respondents have complied with the terms of Rule 57J, the benefit of Modvat credit has to be considered taking the certificate issued by the Superintendent as valid document for the purpose of grant of the Modvat credit under Rule 57E.
3. The learned JDR for the Department has referred to the grounds of appeal which are reproduced below :
1. Commissioner (Appeals) has erred in ordering that the certificates issued for payment of duty on resorcinol, formaldehyde and dip solution are to be considered as valid documents in terms of Rule 57E and that initial clearance of these goods without payment of duty and subsequent payment of duty is to be construed as variation of duty inasmuch as Rule 57E applies only to a situation where the duty has been paid on inputs originally and the same has been allowed as credit under Rule 57 A is varied subsequently. The is clear from the wording of Rule 57E. The said rule reads as follows :
"If duty paid on any inputs in respect of which credit has been allowed under Rule 57A is varied subsequently...Rule 57E laid down that
(a) the duty should have been paid on the input.
(b) the credit of such duty paid should have been allowed; and
(c) the said duty should have varied subsequently in the subject case, (a) the duty has not been paid, in the first instance and (b) the credit has been allowed for the purpose of 57E.
In this subject case, due to mis-interpretation of notification by M.R.F. Limited, Thiruvottiyur, no duty was paid originally and no credit was taken by M.R.F. Limited, Arakonam. Subsequently, on instructions from the Department, duty was paid. This cannot be considered as variation of duty in terms of Rule 57E.
Hence the certificates issued by Superintendent, M.R.F. Limited, Thiruvottiyur cannot be treated as valid documents under Rule 57E and as such credit is not...in respect of duty paid on resorcinol, formaldehyde and dip solution."
4. It is seen from the grounds of appeal as above that the exception has been taken in regard to the documents which have been held to be valid by the learned lower appellate authority for the purpose of taking the Modvat credit. The learned JDR has reiterated the grounds of appeal.
5. We observe that this is a case where the duty was demanded subsequent to the clearance of the goods in respect of the goods which were captively consumed. In such a situation the only evidence that would be available for payment of duty would be in the PLA register or other statutory records and in the absence of any documents, a certificate issued by the jurisdictional Superintendent can be taken to be a valid document for the purpose of taking Modvat credit which might be available to the respondents in terms of the learned lower appellate authority's order in the remand proceedings under Rule 57E. We do not find any force in the plea of the Revenue that the documents as held by the learned lower authority as acceptable could not be considered as a valid document for Modvat purposes.
6. We in the circumstances, therefore, dismiss these appeals of the Revenue.