Customs, Excise and Gold Tribunal - Delhi
Cce, Delhi vs M/S. Bharat Foam Udyog (P) Ltd. on 12 October, 2000
ORDER
K.K. Bhatia, Member (T):
1. The Respondents manufacture P.U. Foam Sheets, Mattresses, Cushions and Cut pieces falling under Chapter Sub-heading 3921.12, 9404.00 and 3915.90. They are also availing modvat credit facility under Rule 57A of Central Excise Rules, 1944. The Asst. Commissioner of Central Excise vide his three order dt. 9.12.97, 25.3.98 and 31.8.98 confirmed a total amount of duty of Rs. 1,98,810/- on the Respondents as also imposed a penalty of Rs. 18,000/- on them on the ground that they had received their inputs 'Drums'. the value of drums was included in the value of inputs, for which, they availed modvat credit. He has observed that in the process of manufacture, the drums have to be opened and after the use of inputs packed in them, the same should be taken to be scrap which arises in the preparatory stages of manufacturing process. It is stated that this scrap is subjected to duty under Rule 57F(4) under the Tariff Heading and the rate applicable to scrap.
2. The party filed appeals against the aforesaid orders of the Asst. Commissioner. The Commissioner (Appeals), New Delhi vide his order dt. 15.5.2000 disposed of the appeals of the party in the following terms:
"I have gone through the records of the case very carefully. I observe that the issue has since been settled vide CBEC Circular No. 449/15/99-CX dated 23.3.99 [1999 (107) ELT T24] vide which it has been held that no duty should be demanded on waste package/containers used for packing modvatable inputs when cleared from the factory of the manufacturer availing modvat credit. The same view has been held by the CEGAT in the case of West Coast Indl. Gases Ltd. vs. CCE, Cochin - 1999 (108) ELT d383 (T). Accordingly, I set aside the Orders in Original and allow the appeals".
3. The Revenue is in appeal against the above order of Commissioner (Appeals). I have heard Shri M.D. Singh, SDR for the appellants and Shri Naveen Mullick, Advocate for the Respondents. the ld. SDR for the Revenue submits that the Boards, instructions relied upon by Commissioner (Appeals) have since been modified by the Circular No. 470/36/99-CX dt. 19.7.99, a copy of which is also filed by the Department. In this Boards Circular, it is stated that the Department has filed an appeal against the CEGAT decision in the case of M/s. West Coast Indl. Gases Ltd. vs. CCE Cochin and the same has been admitted by the Hon'ble Supreme Court. Accordingly, it has been decided by the Board to withdraw the Circular dt. 23.3.99.
4. I have considered these submissions. The Commissioner (Appeals) in allowing the appeal of the Respondents has entirely relied on the CBEC Circular dat 23.3.99 which stands since withdrawn in the light of the admission of the appeal of the Revenue in the case of M/s. Easte Coast Indl. Gases Ltd. vs. CCE Cochin - 1999 (108) ELT 383 (T). In this view of the matter, it appears only fair that the matter is considered afresh by the lower authorities in view of the changed circumstances. Consequently, the order passed by Commissioner (Appeals is set aside and the matter remanded to original authority for passing a de-novo order in the light of the observations recorded above. The Respondents should be afforded reasonable opportunity of hearing before a final view is taken in the matter by the original authority.
5. The Revenue appeal is disposed of in the above terms.
(Announced in the Court)