Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise, Rajkot vs Hindustan Lever Ltd. on 26 April, 2001
Equivalent citations: 2001(138)ELT288(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1.
1. The following questions are posed for reference to the High Court:
(i) Whether the balance of modvat credit lying in RG23A Part II could at all be allowed to be transferred by one manufacturer to another manufacturer in terms of sub rule (6) of Rule 57F of the Rules as it stood then in the event of the former leasing out eh factory to the latter.
(ii) Whether the filing of the declaration (which incidentally is not eh key question in this case) is merely a procedural requirement or is of substantive nature.
(iii) Whether in facts and circumstances of the case the Tribunal could have ignored the ratio of the cases which supported the departments' case.
2. We have heard both sides.
3. As to the first question, the utilisation of the credit by Hindustan Lever Ltd., what the Tribunal had considered was not eh scope or effect of sub rule (6) of Rule 57F. That sub rule permitted transfer of credit in a limited situation, where the factory of a manufacturer shifted to another location. It did not provide for the situation which was before the Tribunal, the change of ownership of the factory by way of merger, amalgamation or other transaction involving takeover of the assets and liabilities of one manufacturer by another. Relying on four earlier decisions of the Tribunal in Sushripada Chemicals vs CCE&C 1996 (88) ELT 109, Ashapura Electricals Ltd vs CCE 1989 (42) ELT 709, Saurashtra Chemicals vs CCE 1998 (101) ELT 379 and Universal Hydrocarbons Co Pvt Ltd vs CCE 1994 (72) ELT 91, the Tribunal held that it was settled that where there is such a takeover of the assets of one manufacturer by another, the one taking over stepped into the shoes of the other so far as payment of duty, availing of credit etc, are concerned. The Tribunal concluded that the effects of the lease which was under consideration by it were not different from those of merger or amalgamation so far as the Central Excise department is concerned, for such purposes as payment of duty and taking modvat credit. It therefore held that Hindustan Lever Ltd. was entitled to utilise the credit earned by Sunrise Soaps and Chemicals Pvt. Ltd. This question therefore does not arise out of the Tribunal's order.
4. The decisions of the Tribunal in P.G. Conductor vs. CCE 1996(81) ELT 336 and others are cited in support of the second question, that filing the declaration under Rule 57G is not merely procedural but substantive. The situation on which these decisions were given is significantly different. In the case before it, the Tribunal found that the declaration under Rule 57G in fact had been filed by Sunrise Soaps & Chemicals Pvt. Ltd and said that it was not necessary for Hindustan Lever Ltd to file such a declaration afresh. This question does not also arise out of the Tribunal's order.
5. The third question evidently does not arise out of the Tribunal's order.
6. The application is accordingly dismissed.