Customs, Excise and Gold Tribunal - Delhi
Kesari Steels vs Collector Of Central Excise on 8 September, 1994
Equivalent citations: 1994ECR407(TRI.-DELHI), 1995ECR758(TRI.-DELHI), 1994(74)ELT123(TRI-DEL)
ORDER K. Sankararaman, Member (T)
1. Shri Y.N. Chopra, learned Consultant is present on behalf of the appellants. He states that he does not have any information as to the present status of the Writ Petition filed by them before the Honourable High Court of Madhya Pradesh at Indore challenging the order of the Collector of Central Excise (Appeals) New Delhi which is the subject matter of the present appeal also. In view of the decision that we intend taking in the matter, we propose to hear both sides and dispose of the appeal without further waiting for the outcome of the Writ Petition in question.
2. Shri Chopra, learned Consultant stated that their case is fully covered on merits as well as on the question of limitation. Modvat credit had been denied to them in respect of ramming mass used by them in the manufacture of their final products cleared on payment of duty. The larger Bench decision in the case of A.B. Tools v. Collector of Central Excise reported in - and the Calcutta High Court judgment in Singh Alloys Steel Ltd. v. Assistant Collector of Central Excise reported in 1993 (66) E.L.T. 594, would cover this item. As regards the second item, namely oxygen gas/acetylene gas used by them in their manufacturing process, he referred to the Tribunal decision in Collector of Central Excise v. Hindustan Development Corporation reported in 1990 (47) E.L.T. 376. He then stated that as regards packaging materials, the same has been used for packaging ramming mass received by them. He then submitted that the notice issued in this case was beyond the period of six months and as there was no element of suppression, misstatement etc., the notice was time-barred. He submitted that there are a number of Tribunal decisions and High Court judgments to support his contention. He pleaded that the appeal be allowed.
3. Shri V.C. Bhartiya, learned Departmental Representative conceded that the larger Bench decision and the Calcutta High Court Judgment referred to by the learned Consultant would support the case of the appellants. He left the matter to be decided by the Bench.
4. We have considered the submissions. The contention raised by Shri Chopra, learned Consultant for the appellants is fully valid. The decisions cited by him relate to the very issues which are the subject matter for decision in the present case and we respectfully follow the said decisions and allow the appeal. As regards the third item namely packaging materials, the same are stated to be used for packaging the inputs namely ramming mass. When the ramming mass itself has been held to be eligible for modvat credit, the packaging materials used for them and the value of which is included in the assessable value of the latter, has to be treated on par with the same. There is no case made out that the packaging materials are such as are specifically excluded in terms of the explanation under Rule 57A on account of their cost not being included in the assessable value of the materials packaged using them. Hence such materials also would be eligible for the benefit claimed.
5. In view of the appeal being allowed on merits, we do not feel it necessary to decide the case with reference to the plea of limitation which has been raised as an alternative ground. No doubt, as Shri Chopra pointed out, there are a number of Tribunal decisions for the proposition that time bar would apply in case of notices issued for recovery of wrongly availed of modvat credit. There are also similar judgments of two High Courts namely the Karnataka High Court in Tungabhadra Steel Products Ltd. v. Superintendent of Central Excise reported in 1991 (56) E.L.T. 340 and the Madras High Court in Advani Oerlikon Ltd. v. Assistant Collector of Central Excise reported in 1993 (63) E.L.T. 427 but we are also aware of a contrary judgment rendered by the Honourable Gujarat High Court in the case of Torrent Laboratories v. Union of India reported in 1991 (55) E.L.T. 25 (Guj.) to the effect that the provision of Section 11A of the Central Excises and Salt Act, 1944 cannot apply to cases falling within the scope of Rule 57-1 for disallowance of modvat credit and recovery of such credit if wrongly utilized. These conflicting judgments have given rise to a proposal made by the West Regional Bench of the Tribunal for a reference to the Honourable Supreme Court under Section 35H of the Central Excises and Salt Act, 1944. That was in Collector of Central Excise v. Maradia Steel Pvt. Ltd. reported in 1992 (59) E.L.T. 59. The notices in the present case had been issued prior to the amendment of the Rule 57-1 of the Central Excise Rules making it self-contained with reference to the requirement of notices being issued within a period of six months in normal cases. We are however not going into the said question as the appeal has been allowed by us on merits.
6. The Collector of Central Excise, Indore has filed a cross-objection in the same matter. The plea therein is only for the disallowance of the appeal and the upholding of the order-in-appeal. The cross-objection is misconceived and is not maintainable. As we have allowed the appeal, the cross-objection gets disposed of automatically.