Custom, Excise & Service Tax Tribunal
M/S Vacmet Packaging (India) Pvt. Ltd vs Cce, Kanpur on 17 October, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
R.K. PURAM, W.B. NO.2, PRINCIPAL BENCH
NEW DELHI, COURT NO.I
Excise Appeal No. 5088 of 2008
[Arising out of Order-in-Appeal No.375-CE/Appl/KNP/2004 dated 27.7.2004 passed by the Commissioner (Appeals) Customs & Central Excise, Kanpur]
Date of Hearing/ decision: 17.10.2008
For approval and signature:
Hon'ble Mr. Justice S.N. Jha, President
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982.
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
,,,,,,,,,M/s Vacmet Packaging (India) Pvt. Ltd., Appellant
Vs.
CCE, Kanpur Respondent
Appearance:
Mr. Atul Gupta, Advocate for the Appellant
Mr. C.S. Rajput, DR for the Respondent
CORAM: Mr. Justice S.N. Jha, President
Mr. M. Veeraiyan, Member (Technical)
O R D E R
Per M. Veeraiyan:
Heard both sides on the appeal against the order of the Commissioner (Appeals) dated 27.02.2004.
2. The first issue relates to clearance of inputs on which modvat was taken and cleared as such. They cleared paying duty at the rate of 10%, the rate at which duty was paid by the manufacturer of inputs and duty so paid was taken as credit by the appellant. The Department held that as the goods were deemed to have been manufactured by the appellant prior to amendment by Notification No. 28/95 dated 29.6.95, they ought to have paid duty @ 20% and accordingly demand of Rs. 4728/- was confirmed.
3. Learned Advocate relies on the decision of Five Member Bench of the Tribunal in the case of CCE, Vadodara vs. Asia Brown Boveri Limited reported in 2000 (120) ELT 228 (Tribunal-LB) wherein it has been held that the legal fiction of deemed manufacture by the input receiver was to enable collection of the duty of excise payable at the time of removal of such inputs for home consumption which should not be less than the amount of credit that has been allowed in respect of inputs. In the light of this, the submission of the learned Advocate is accepted. The demand in this regard is set aside.
4. The second issue relates to confirmation of differential duty on certain final products cleared by them describing them in the invoices as grade B and grade C etc. Learned DR submits that the appellant has not indicated the gradewise details in the RG-I or in the RT-12 returns. In the absence of such details, and in view of the wide variation in the prices it was reasonable to conclude that the so called B and C grade were only A grade. However, learned Authorised Representative submits that they have purchased higher grade raw materials @ Rs. 132/- per kg. and also some quantity of raw materials @ Rs. 37.50 per kg./ Rs. 38.25 per kg. In addition, some quantum of goods processed while manufacturing were taken as second grade due to quality considerations. They have not indicated the same in the RG-I register gradewise, as there was no such legal requirement. Further, the Department has not proved that what was sold as grade C or grade B was of higher grade and that they realized amounts higher than what was mentioned in the invoices. No statement was also taken from any officers of the firm.
5. The submissions of the learned authorized representative merits acceptance. In the absence of any legal requirement to mention gradewise the manufactured goods, the presumption by the department that what was cleared as grade C, grade B was of higher grade cannot be upheld.
6. Therefore, the appeal is allowed with consequential relief.
[Dictated and pronounced in the open Court].
[Justice S.N.Jha] President [M. Veeraiyan] Member (Technical) [Pant]