Customs, Excise and Gold Tribunal - Mumbai
Modernova Plastyles Pvt. Ltd. And Anr. vs Cce on 1 December, 2003
Equivalent citations: 2004(112)ECR660(TRI.-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Appeals taken up for disposal with consent after waiving deposit.
2. The question for consideration in this appeal is whether Modernova Plastyles Pvt. Ltd. who manufactured on job work for Mirc Electronics Ltd. cabinets for television sets by using moulds owned and supplied by the latter, could take credit under 57Q of the duty paid on these moulds by their manufacturer. In the order impugned in the appeal, the Commissioner has found such credit to be impermissible on the ground that the manufacturer was not the owner of the goods, demanded the credit so taken and imposed penalty on the manufacturer and Mirc Electronics under Rule 209A for abetting taking wrong credit. He also ordered confiscation of the moulds.
3. Credit was taken on various dates in June 1997 and January 1999. The contention of the counsel for the appellant is that the rules as it stood during this period do not mandate as it did prior to its amendment on 17.6.1994 that ownership of capital goods as a criteria for taking credit. He relies upon the decision of the Tribunal in German Remedies v. CCE . The departmental representative who supports the order points that this order was not cited before the Commissioner.
4. In the decision cited by the counsel for the appellant the Tribunal after examining the provisions of Rule 57R(3) as it was initially introduced and after its amendment on 17.6.1994. It found that while the rule before its amendment prohibited taking of credit on capital goods that had not been transferred by direct purchase to the manufacturer after amendment Sub-rule (3) of Rule 57R specifically provided that credit would be allowed on such capital goods as were acquired on lease, hire purchase or loan subject to condition and restriction as may be specified. It concluded that effect of this amendment was not to restrict taking of credit only to case where the capital goods were acquired from a finance company by any of the mode specified in the rule, and that the provision of Sub-rule (3) "will be applicable only in cases (sic) where a manufacturer acquires a capital goods in any manner as specified therein." On this conclusion it held that the appellant before it was entitled to take credit on the capital goods sent to it to Madhouse Pharmaceutical Pvt. Ltd. on bailment agreement. It must be recorded that the Tribunal's decision was not in existence when the Commissioner passed his order.
5. The sole reason for denial of credit, the absence of ownership of the capital goods by the manufacturer cannot be sustained. Credit was therefore rightly taken.
6. Appeals are allowed and the impugned order set aside. Consequential relief in accordance with law.