Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise, ... vs Apseb on 3 September, 2001
Equivalent citations: 2002(147)ELT290(TRI-CHENNAI)
JUDGMENT
Jeet Ram Kait, Member (Technical)
1. All these appeals are filed by revenue on the ground that the Commissioner (Appeals) has erred in allowing the credit since the said order of the Commissioner (Appeals) deals with stock transfer of goods whereas in the present case the inputs are supplied free of cost to the job worker. They have also submitted that the judgment of Hon'ble Tribunal in the case of MODERN FOOD INDUSTRIES (INDIA) LTD. 1998 (18) ECR 541 is not relevant to the present case as it deal with book adjustment of case by way of stock transfer. They have also submitted that the correct procedure as laid down in the rules has not been followed and the job workers is not entitled to avail credit. The procedure followed by the assessee is in contravention of provisions of notification No. 32/94-CE (NT) as amended by notification No. 14/95-CE(NT) dated 20.4.95 and hence they are not eligible for the credit. It has also been stated by them in the grounds of appeal that as per notification No. 14/95-CE (NT) dated 20.4.95 which amended the notification No. 32/94-CE (NT) dated 4.7.94 for taking the modvat credit on invoices under rule 57GG, there should be a sale involved. Since the present case, there is no sale or stock transfer involved and only the goods are supplied free of cost to the job worker, he is not entitled to avail any modvat credit on the invoice received by him which is issued without involving any sale.
2. Heard Shri S. Soundararajan, Ld. DR appeared for revenue and has reiterated the grounds of appeal submitted by the Commissioner.
3. None appeared for respondents.
4. Since the issue is covered we are taking stay and main appeal together for disposal.
5. The Ld. Commissioner has recovered his finding and the relevant judgment in paras 6 & 7 of the impugned order. The same are extracted herein below:-
6. I find that in the instant case, modvat credit has been disallowed for the sale reason that the invoices on which credit is availed are received in stock transfer and not "sale" transaction, whereas as per Notification No. 14/95 (CE) NT dated 20.4.95, there should be sale of goods to the person availing modvat credit under Rule 57G of the Central Excise Rules, 1944. The appellants have claimed that they have fully complied with all other conditions of availing modvat credit i.e., the goods are duty paid, they are otherwise eligible to modvat credit, they are received into the factory under excise invoices, they are properly accounted for and used in the manufacture of dutiable final production.
7. The Tribunal in the case of BPL Ltd., v. CCE - 1997 (73) ECR 829 (T) has held that the term "sale" ad defined under Section 2(h) of the Central Excise Act, 1944 also includes book adjustments made in the case of stock transfers. The Tribunal in the case of Modern Food Industries (India) Ltd., (1988 (18) ECR 541) has held that transfer of goods by book adjustment from one unit to another for a multi unit organisation is adequate for the purposes of the definition of "sale" in CEA: Section 2(h), and Modvat credit of the duty paid on the goods so transferred is permissible. Commissioner (Appeals), Tiruchirapally in the case of Coimbatore Cots and Coating Ltd., (1999 (106) ELT 575 (commissioner (Appeals)) has held that the stock transfer is covered within the meaning "sale" as defined in Section 2(h) of the Central Excise Act, 1944 and allowed the credit. On the similar grounds, at the Asian Paints' own depot the Show Cause Notice issued by the Department seeking imposition of penalty was set aside by the Commissioner of Customs & Central Excise, Pune by his Order-in-Original No. 17/CEX/1997 dated 17.2.97. I am in respectful agreement with the above case laws. Applying the ratio of the above case laws, I hold that the invoices on which modvat credit has been disallowed vide the impugned order, will fall well within the ambit of "sale" as stated in Notification No. 14/95 CE (NT) dated 20.4.95 and, therefore, are eligible to modvat credit. The impugned order denying the modvat credit is not sustainable. Since the modvat credit has been held to be admissible to the appellants, the question of imposition of penalty does not arise. The same is not aside.
6. We therefore find the modvat credit is available to a manufacturer irrespective of the sale as held by the Tribunal judgment noted by the Commissioner. We do not find any infirmity in the impugned order and same are confirmed. The stay applications and revenue appeals are therefore dismissed. Ordered accordingly.
(Order dictated and pronounced in the open court)