Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise, Trichy vs M/S Continental Packagings And M/S Sree ... on 16 August, 2001
ORDER Jeet Ram Kait, Member (T)
1. All the three appeals are filed by the Revenue against the common order in Appeal and are being taken up together for disposal as per law.
2. The issue involved in these appeals is that during the manufacture of HDPE Sacks, intermediate products i.e. laminated fabric comes into existence which is further used in the manufacture of final product. The final product HDPE sacks were exempted from payment of duty and thereby duty had to be paid on the intermediate products in terms of Notification No.217/86-CEX. The Assistant Commissioner of Central Excise, Trichy, vide his order in original No.196/95 dt.30.6.95 demanded duty on laminated flat fabrics which emerged during the manufacture of final products that is to say as HDPE woven sacks as they could not avail the benefit of Notification No.217/86 as the final product was cleared duty free. However, the Commissioner (Appeals), in his order in appeal No.45, 46, & 47/97 (T) dt.31.3.97, upheld the order of the Assistant Commissioner and the Commissioner (Appeals), at the same time, referred to the alternative plea of the applicants in the appeal for the grant of credit on the inputs used in the manufacture of laminated flat fabrics and directed the Assistant Commissioner to extend the same after due verification. The Revenue has also stated that if the above order of the Commissioner (Appeals) of extending the Modvat credit on the inputs in question is conceded, it would tantamount to giving the benefit of Modvat retrospectively. Moreover, in the instant case, no Modvat declaration was filed and no statutory procedure for the availment of Modvat under Rule 57 A was followed. In view of the above facts and circumstances, the Revenue has filed this appeal on the plea that the assessee is not eligible to avail the benefit of Modvat credit. Therefore, challenging the order in appeal in regard to the Modvat credit on the inputs, passed by the Commissioner (Appeals), the Revenue considered it as not proper and illegal. They have requested that the order of the Commissioner (Appeals) extending the Modvat credit on the inputs in his order in appeal No.45, 46 & 47/97 (T) dt.31.3.97 should be set aside.
3. The Ld. DR for the Revenue reiterates the grounds as mentioned in the appeal filed by the Department.
4. Appearing for the Respondents the Ld. Consultant Shri R. Masilamony has argued that the issue is no longer res integra and the same has already been decided by CEGAT in the matter of Surgi Plast Ltd. vs. CCE, Ahmeadabad reported in 2000 (119) ELT 434(T) in which it has been held that Modvat credit cannot be denied simply for non filing of declaration where initially finished product was considered to be exempted from payment of duty. Therefore, Modvat credit would be admissible to them.
5. We have considered the submissions made by both the sides and come to the conclusion that the issue is no longer res integra and the same has already been decided by the Tribunal in the case of Surgi Plast ltd. Vs. CCE (Supra) the findings recorded by this Tribunal in para 3 are extracted hereinbelow.
"3. We have considered the submissions of the Ld.DR and perused the records. The appellants have mentioned in their memorandum of appeal that according to New Lexicon Webster Dictionary, canula means, a tube used for insertion into a duct or cavity for the purpose of withdrawing fluid or injection medication into the body; that the syringes manufactured by them used for injecting fluid into the body and as such product ought to have been considered as canula. We observe that Sl.No.9 of the Notification exempts only disposable and non disposable canula for aorta veins cavae and similar veins and blood vessels and not the disposable syringes. The Products manufactured by the appellants in disposal syringes, which are not exempt by the Notification and as such benefit of Notification has been rightly denied to them. As far as availability of Modvat credit is concerned this Tribunal has been consistently holding that Modvat credit cannot be denied simply for non filing the declaration in cases where initially finished product was considered to be exempted from payment of duty. The appellants would be eligible for the availment of Modvat credit subject to the condition that they satisfy the Assistant Commissioner about the availability stock of inputs at the relevant time stock for the purpose of Rule 57 h and also satisfy the Assistant Commissioner about their duty paid nature. Subject to this appeal is rejected."
6. The Commissioner (Appeals) in his order dated 31.3.97 has rejected all the appeals, but allowed the plea of extension of benefit of Modvat credit on the inputs used in the manufacture of laminated flat fabric after due verification as per his findings contained in para 7 of his order, which is extracted herein below.
"7. However, the alterative plea of the appellants for grant of credit on the inputs deserves consideration in the light of the Tribunal's decision in a number of case, viz. Roche Product Limited reported in 1995 (78) ELT 127 and Apex Steels Limited reported in 1955 (80) ELT 368 (T). Accordingly, the appellants would be entitled to the benefit of Modvat credit on the inputs i.e. flat fabric and grannules that have gone into manufacture of laminated flat fabrics subject to production of duty paying documents. The AC is accordingly directed to extend the same after due verification. The AC's orders are therefore modified to the above extent only."
7. In terms of the above ratio of the Tribunal decision, in the case of Surgi Plast Ltd. Vs. CCE, AHMEDABAD (supra) we do not find any merit in the appeal filed by the Revenue, accordingly the appeal filed by the Revenue is rejected as Modvat credit cannot be denied simple for non filing of declaration where initially finished product was considered to be exempted from payment of duty. We, therefore confirm the order passed by the Commissioner (Appeals) and reject the appeal filed by the Revenue, as there is no infirmity in the order passed by the Commissioner (Appeals). Ordered accordingly.
(Order dictated and pronounced in the open court)