Customs, Excise and Gold Tribunal - Delhi
Raymonds Synthetics Ltd. vs Commissioner Of C. Ex. on 9 January, 1997
Equivalent citations: 1999(107)ELT738(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. The appellants filed this appeal against the Order-in-Appeal No. 196/CE/Alld./92, dated 8-10-1992 passed by the Commissioner (Appeals) Central Excise, Allahabad. The Commissioner in the impugned order held that Rule 57H of Central Excise Rules, 1944 does not visualise any such inputs which are not laying in the sotck in the factory but are lying somewhere else and rejected the contention of the appellant that inputs lying with the processor on that date, are very much part of their stock.
2. Brief facts of the case are that appellant applied for permission for taking Modvat credit on their inputs received prior to filing of their declaration under Rule 57G of the Central Excise Rules, 1944 on 29-7-1991 under 57H of Rules as amended by Notification No. 28/91, dated 25-9-1991 vide which special facility was given to the man-made fibre and filament yarn to obtain credit of duty on the inputs lying in stock or received in the factory on or after 25-7-1991 and also on such inputs as are used in the manufacture of final product which are cleared from the factory on or after 25-7-1991. Vide impugned order the Commissioner remanded the case back to the Assistant Commissioner to re-consider the matter afresh in view of the provisions of Rule 57H of the Rules. In the impugned order the Commissioner held that the inputs lying in the processor factory or anywhere else are not part of the stock lying in the factory of the appellant. Against these findings appellant filed this appeal.
3. Ld. Counsel appearing for appellant submitted that finding of the Commissioner that inputs should be physically available in the factory premises for the purpose of allowing credit was contrary to the provisions of Rule 57H of Central Excise Rules, 1944. He further submitted that Rule 57H clearly allows the credit of duty on inputs, which are lying in stock or are remained in the factory on or after the 25th July, 1991, and such inputs are used in manufacture of final product which are cleared from the factory on or after the 25th July, 1991. He further submits that inputs lying as such and also contained in the intermediate product, which also declared as input, are lying with processor factory on 25-7-1991 only on account of the appellant manufacturer and such inputs are ultimately returned to the appellant factory on or after 25-7-1991 for their use in the manufacture of the final product. Hence these inputs are part and parcel of the stock of input lying in stock in the factory. In these circumstances he prays that Modvat credit in respect of inputs lying with processor on the date 25-7-1991 be allowed.
4. Shri Y.R. Kilaniya, ld. JDR reiterates the findings of the lower authorities.
5. Heard both sides. In this case, point for consideration is that whether the inputs lying with processor of the assessee can be considered as inputs lying in the stock on 25-7-1991 as provided under Rule 57H of Central Excise Rules, 1944. Rule 57H provides as under :-
(1) Notwithstanding anything contained in Rule 57G, the Assistant Collector of Central Excise may allow credit of the duty paid on inputs received by a manufacturer immediately before obtaining the dated acknowledgment of the declaration made under the said rule if he is satisfied that :-
(a) such inputs are lying in stock or are received in the factory on or after the 25th day of July, 1991, or
(b) such inputs are used in the manufacture of final products which are cleared from the factory on or after the 25th day of July, 1991 and that no credit has been taken by the manufacturer in respect of such inputs under any other rule or notification:
Provided that no credit under this sub-rule shall be allowed in respect of inputs received, or declaration made under Rule 57G on or after the 1st day of September, 1991:
Provided further that such inputs are not used in the manufacture of final product which is exempt from the whole of the duty of excise leviable thereon or is chargeable to Nil rate of duty.
6. The case of the appellant is that these inputs were directly sent to the processors and on 25th July, 1991 these were lying in the stock of processor. The Rule 57H provides that Assistant Collector may allow credit of duty paid on inputs received immediately before obtaining dated acknowledgment of declaration if he is satisified that such inputs are lying in stock or are received in the factory on or after 25-7-1991.
7. The rule provides that the Assistant Commissioner on his satisfaction may allow such credit. If the inputs are lying in the stock of various processors, as in the case of appellant, how the Assistant Collector verify the duty paying character of such inputs. The Rule only provides that Assistant Collector may allow credit if he is satisified on such inputs are lying in or are received in the factory on or after 25-7-1991. The Rules dose not cover the inputs which were laying in stock of various processors. In view of the above discussion, we do not find any infirmity in the impugned order. The appeal is dismissed. The cross-objections also disposed of in the same terms.