Customs, Excise and Gold Tribunal - Mumbai
Gujarat Alkalies And Chemicals Ltd. vs Commissioner Of Central Excise And ... on 10 November, 2000
Equivalent citations: 2001(73)ECC707
ORDER J.H. Joglekar, Member (T)
1. On hearing Shri D.M. Mehta, learned consultant for the applicants and Shri J.M. George for the department, we find that the issue being limited this appeal could be taken up for disposal. Both sides agreeing, this was done.
2. The appellants manufactured potassium carbonate and hydrogen peroxide. These goods were exported by them under claim of drawback. The assessees had taken input stage credit of the duty paid on the materials used in the manufacture of these two products. Four Orders-in-Original were passed disallowing Modvat credit totally amounting to Rs. 52,31,163. The assessees filed four appeals which were disposed of by the Commissioner (Appeals) in a single order. The Commissioner observed that the assessees had availed of drawback at brand rate on hydrogen peroxide. The Commissioner observed that in this situation the appropriate authorities would have taken into account the availment of Modvat credit and would have reduced the quantum of Modvat to that extent. On this ground he observed that the question of availing of double benefit would not arise. He allowed the appeal subject to verification by the Assistant Commissioner of the documents wherein the assessees had taken Modvat availment. As regards the other product namely potassium carbonate he observed that the availment of drawback was at the all industry rate. He did not accept the claim of the assessee on the following observations:
Thus it is observed that the appellant had already availed the benefit of drawback at the rate of Rs. 2155 per M.T. This amount has been fixed towards all Customs duty which include CVD as well. Therefore, they are not entitled to take the credit of the said amount again as Modvat credit. As per the first proviso of Rule 3 of the Duty Drawback Rules, 1995 no credit of duty on inputs can be allowed if the appellants had availed the benefit of duty drawback scheme. In view of this the adjudicating authority has correctly disallowed the Modvat credit to the appellants on Potassium Carbonate.
The appeal is disposed of on the terms mentioned above.
3. We have considered this logic. The first proviso of Rule 3 of the Duty Drawback Rules, 1995 reads as follows:
Provided that where any goods are produced or manufactured from imported materials or excisable materials on some of which only duty chargeable thereon has been paid and not on the rest, or only a part of the duty chargeable has been paid; or the duty paid has been rebated or refunded in whole or in part or given as credit, under any of the provisions of the Customs Act, 1962 (52 of 1962), and the rules made thereunder, or of the Central Excise and Salt Act, 1944 (1 of 1944) and the rules made thereunder, the drawback admissible on the said goods shall be reduced taking into account the lesser duty paid or the rebate, refund or credit obtained.
4. The Drawback Rules would govern the quantum of drawback in a given situation but would not make any provision for reducing the quantum of Modvat credit available under an entirely different enactment.
5. We find that the learned Commissioner had incorrectly read and interpreted the said rule leading him to dismissal of the appeal. We therefore allow this appeal and remit the proceedings back to the Commissioner who will once again hear the assessees, go into the actual interpretation of the said rule and then given his decision.