Customs, Excise and Gold Tribunal - Delhi
Saphire Steels (P) Ltd. vs Collector Of Central Excise on 3 March, 1994
Equivalent citations: 1995ECR267(TRI.-DELHI), 1994(71)ELT1049(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. We have also taken up on the oral request of the ld. Advocate, Shri Rajesh Chhibber, Stay Petition No. 261/94-B1 in Appeal No. E/511/94-B1 in the case of M/s. Durga Ispat (P) Ltd. inasmuch as issue involved in this matter is identical to the ones already listed on board today.
2. Shri Rajesh Chhibber, ld. Advocate, in support of the applications praying for waiver of pre-deposit and stay of recovery of demands of duty from various applicants herein, submits that a common issue is involved in all these matters and, therefore, they can be dealt with by a common order. We agree with him and proceed to pass common order for all these applications.
3. Following amounts of duty have been prayed for waiver of pre-deposit and stay of recovery in respect of various appellants as mentioned below :
________________________________________________________________________ S. A. No. NAME OF THE APPLICANTS DEMAND ________________________________________________________________________ No. CONFIRMED
1. 198/93 M/s. Barnala Indus, MZN 67,942/-
2. 199/93 M/s. Bhagirathi Iron & Steel (P) Ltd., 60,053/-
MZN
3. 200/93 M/s. Durga Ispat (P) Ltd. 1,05,892/-
4. 201/93 M/s. Bharat Steel Rolling Mills (Unit 1,00,841.20 No. 2)
5. 202/93 M/s. Bansal Iron & Steel Rolling Mills 15,276.60
6. 203/93 M/s. Ishwar Steels (P) Ltd. 60,571.20
7. 204/93 M/s. O.K. Industries. 19,973.20
8. 205/93 M/s. National Steel Rolling Mills 2,15,753.80
9. 208/93 M/s. Saphire Steels (P) Ltd. 1,30,446.80
10. M/s. Nidhi Rolling Mills 93,357/-
4. Ld. Advocate submits that by Notification No. 202/88, dated 20-5-1988 as amended by Notification No. 33/92-C.E., dated 1-3-1992 input was described as 're-rollable material of iron and steel other than stainless steel' out of which could be manufactured 'Bars and rods of iron and steel' without payment of duty provided rerollable material was duty paid. However, by Notification 53/92-C.E., dated 10-3-1992, he states, input was further amplified as "ingots, bars, rods and other Tollable or rerollable material of iron and steel other than stainless steel" for conversion into bars and rods of iron and steel without payment of duty. Revenue has contended that since the inputs "ingots, bars, rods and other Tollable material" has been added into specified inputs with effect from 10-3-1992, therefore, ingots used before 10-3-1992 for conversion into bars and rods would not be entitled to the benefit of Notification No. 202/88 before its amendment on 10-3-1992. Hence the aforesaid amounts of duty have been demanded by the Revenue from the various applicants for the period 1-3-1992 to 9-3-1992 on the ground that duty paid ingots used by the various applicants for manufacture into bars, rods of iron and steel are not entitled to the benefit of Notification No. 202/88 before its amendment by Notification No. 53/92, dated 10-3-1992.
5. Ld. advocate submits that there had been an omission by the Central Government in introducing entry at serial No. 2A in the Table to Notification No. 202/88 when it was amended by Notification No. 33/92, dated 1-3-1992. This omission was made good by the Central Government by making a suitable amendment by Notification No. 53/92, dated 10-3-1992. He, therefore, submits that the intention of the Government was all along to allow the benefit of Notification No. 202/88 even if ingots and other Tollable material were used for conversion into bars and rods. Therefore, in view of this clear intention duty should not have been levied by the department as has been duty upon lower authorities.
6. He, further, submits that even if it is assumed that Revenue is right in imposing duty on bars and rods manufactured from duty paid ingots since ingots and, other Tollable materials were not specified as prescribed inputs, the department is duty bound under the MODVAT rules to give credit of duty paid on ingots used in manufacture of bars and rods. This credit has been denied by the lower authorities on a superficial ground that a proper declaration under Rule 57G of the Central Excise Rules, is required to be made before grant of MODVAT credit of duty paid on inputs. Ld. advocate has submitted that this finding of the lower authority is prima facie not tenable in view of the fact that the applicants had availed of the benefit of Notification No. 202/88 (as amended) on their understanding of the legal position. If that legal position is found to be wrong subsequently, alternative benefit available to the appellant/applicant should not be denied merely because of some procedural deviation. For this proposition he relies on Tribunal's judgment in the case of Byco International & Others v. Collector of Central Excise, New Delhi reported in 1993 (49) E.C.R. 126. Ld. advocate, therefore, submits that applicants have strong prima facie case in their favour and the stay petitions be allowed unconditionally. He also submits that he would have no objection to matters being remanded, to the original authority for verifying duty paid character of the ingots used in manufacture of bars and rods and then asking the said authority to allow the MODVAT credit on such verification and adjust the duties now demanded against such admissible MODVAT credit.
7. Ld. JDR, Shri K.K. Dutta reiterates the findings of the lower authorities as already set out above. He also relies upon, for the plea of following the procedural requirement in allowing MODVAT credit, on the following two citations :
(i) 1990 (48) E.L.T. 279 (Tri.)
(ii) 1988 (38) E.L.T. 485.
8. On the question of allowing the MODVAT credit he submits that the matter is left for the discretion of the Bench. He, however, points out that there is no mention in the order that the ingots are already duty paid. He, therefore, further points out that the duty paid character of the ingots will have to be ascertained by the lower authority if the Bench desires to remand the matters.
9. We have carefully considered the pleas advanced from both the sides. We are not impressed by the pleas raised by the ld. advocate that they were eligible to use ingots for manufacture of bars and rods when the prescribed inputs was only rerollable material. Plea of omission on the part of Central Government cannot be taken at its face value, in the absence of any clear words to that of fact. We, therefore, hold that duty liability for the period 1-3-1992 to 9-3-1992 in respect of bars and rods manufactured out of duty paid ingots has been correctly imposed upon the various applicants by the Revenue.
10. However, we find sufficient force in the second plea of the ld. adovcate. There is no dispute that ingots and bars and rods are specified in Notification No. 177/86 issued under Rule 57A of the Central Excise Rules, 1944. Therefore, MODVAT credit of duty paid on ingots used in the manufacture of bars and rods would be available to the various applicants. Mere fact that the applicants could not file a declaration on the ground of their plea that they were entitled to Notification No. 202/88 cannot deprive the applicants/appellants benefit of MODVAT credit. Accordingly, we allow the stay petitions unconditionally. In the facts and circumstances, we remand the matters to the adjudicating authority to allow the MODVAT credit and adjust the payment of duty now demanded from them against such MODVAT credit admissible to them after verifying the duty paid character of ingots (inputs) in accordance with law. Appeals are thus allowed by remand in the light of the aforesaid directions.
Dictated and pronounced in the open court.