Customs, Excise and Gold Tribunal - Delhi
M/S. Savitri Concast Pvt. Ltd. vs C.C.E., Jaipur on 8 May, 2001
Equivalent citations: 2001(138)ELT296(TRI-DEL)
ORDER K.K. Bhatia, Member (T)
1. The appellants manufacture "Ingots" falling under Chapter No. 72 of the Schedule to the Central Excise Tariff Act, 1985. They were availing modvat facility under Rule 57-A/57-Q of the Central Excise Rules, 1944 and with effect from 1.8.97, they started paying duty on the compounded rates as provided under Section 3A of Central Excise Act, 1944. They were issued a show cause notice dt. 29.1.98 by the Asst. Commissioner, Central Excise, Jaipur calling upon them to show cause why the duty amounting to Rs. 1,47,319/- in respect of the inputs lying in stock on this date and the inputs used in the manufacture of final products should not be recovered from them under Rule 57-I of Central Excise Rules, 1944 and further why a penalty should not by imposed on them. On considering the reply of the party, the Dy. Commissioner of Central Excise, Jaipur vide his Order dt. 5.5.99 dropped the proceeding and vacated the aforesaid show cause notice.
2. The above order of the Dy. Commissioner was reviewed by the Commissioner of Central Excise, Jaipur-I and an appeal filed before Commissioner (Appeals). The Commissioner (Appeals), Jaipur vide his order dt. 8.5.2000 allowed the appeal of the Department by setting aside the order passed by the Original Authority. In arriving at this decision, the ld. Commissioner (Appeals) relied on the decision of the Hon'ble Allahabad High Court in the case of M/s. Super Cassette India vs. UOI reported in 1997 (94) ELT 302 (Allahabad).
3. The present appeal is against the above order of the Commissioner (Appeals). I have heard Shri Pankaj Mullick, C.A. for the appellants and Shri S. Kumar, JDR for the respondents. I have considered the submissions made before me by both the sides. It is observed that the Department in their appeal before Commissioner (Appeals) relied on the provisions of Rule 57-H (7) read with Rule 57-F (17)(c). The former sub-rule provides that a manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year and who has been availing of the credit of the duty paid on inputs before such option is exercised, shall be required to pay an amount equivalent to the credit, if any, allowed to him in respect of inputs lying in stock or used in any finished excisable goods lying in stock on the date when such option is exercised. The latter sub-rule provides that on 1.8.97, the modvat credit lying in balance with the manufacturers of the type under consideration who opt for paying duty under Section 3A shall lapse and shall not be allowed to be utilised for payment of duty on any excisable goods. It is observed that in the present case both of these provisions do not adversely effect the case of the appellants. Here, the appellants on 1.8.97 started paying duty on the compounded levy rates under Section 3A and as such it is a swatch over of payment of duty from one mode to another and not opting for exemption from payment of Central Excise duty as stipulated under Rule 57-H (7). Further, they had also not utilised any modvat credit lying in balances in their account after this date since the same had lapsed in terms of Rule 57-F(17). Therefore, there is no ground for asking them to pay any duty, as there is no such provision. The reading by the lower appellate authority of the judgement of the Hon'ble Allahabad High Court in the case of Super Cassette India (supra) is misconceived, as the observations of the High Court in that case that there can be no finalised credit unless the inputs are used in accordance with Rule 57-A and Rule 57-F and either excise duty is paid in final product or the inputs are otherwise disposed off for home consumption or exported, are made in respect of the final products which are cleared without payment of duty. In the present case, the final products are cleared on payment of duty and the modvat credit laying in credit of the appellants had immediately lapsed on the appointed date and was not used thereafter. Therefore, the conduct of the appellants is perfectly within the ratio of the judgement of the Hon'ble Allahabad High Court. The order passed by the lower appellate authority therefore, is not sustainable. The appeal is thus allowed by setting it aside.
(Announced and dictated in the Court)