Customs, Excise and Gold Tribunal - Delhi
Shreyans Industries Ltd. vs Commissioner Of Central Excise on 6 October, 2004
Equivalent citations: 2005(179)ELT351(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been directed against the impugned order-in-original vide which the demand of Rs. 10,83,138/under Section IID and Rs. 6,18,163/- under Rules 57-1 and 57-AD read with Section HA(1) of the Act with interest and penalty of equal amount had been confirmed against the appellants.
2. The learned Counsel has contended that no demand under Section 11D could be confirmed against the appellants as the appellants did not charge/collect the duty from their buyers. They were working under the exemption Notification Nos. 6/2000 and 3/2001 at that time and the price charged by the appellants, accordingly to the Counsel, was a composite price and there is no evidence on record to prove the collection of duty by them from the buyers. In support of this contention, Counsel has placed reliance on the ratio of law laid down in Pitambar Coated Paper Ltd. v. CCE, Jaipur [2003 (152) E.L.T. 392]. Regarding the confirmation of duty under Rule 57-AH(1), the Counsel has contended that the appellants reversed the Modvat credit at the rate of 8% in respect of the inputs on which they claimed the credit and utilised in the manufacture of the exempted goods. The adjustment of that amount has been wrongly denied to them. He has further stated that after crossing the exemption limit, the appellants paid the duty on the goods and they were entitled to take the credit on the duty paid inputs used in the manufacture of those goods, as per law. Therefore, the impugned order deserves to be set aside.
3. On the other hand, the learned SDR has reiterated the correctness of the impugned order and argued that provisions of Section 11D over-rides the other provisions of law including that of Modvat credit. The impugned order according to him has been correctly passed.
4. We have heard both the sides and gone through the records.
5. From the record, it is evident that the appellants during the period in question (March to June, 2001) were engaged in the manufacture of different varieties of writing and printing paper and under Notification No. 6/2000, they were entitled to clear the goods without payment of duty up to the limit of 2500 MT and beyond that, they were required to pay duty at the rate of 16%. Thereafter, through Notification No. 6/2G00, the exemption limit was raised to 3500 MT and duty became payable after crossing that limit. The duty under Section 11D has been confirmed on the ground that the appellants charged the duty along with the price of the goods, from the DC S & D. But in our view, this ground is not tenable. The price of the goods agreed upon between the appellants and the 13GS & D was a composite price. The appellants cleared the goods at a nil rate of duly and they specifically reflected this fact in the invoices also. Therefore, it can be safely concluded that no duty was charged by them from the DGS&D. The case of the appellants in this regard is squarely covered by the ratio of law in the case of Pitambar Coated Paper Ltd. (supra) where in similar circumstances, demand was raised by the department from an assessee and the same was set aside by the Tribunal. Therefore, the impugned order confirming the duty under Section 11D against the appellants is set aside.
6. Then comes the next demand of Rs. 6,18,163/- confirmed under Rules 57-AH and 57-1. We find from the record that the appellants had been reversing the credit at the rate of 8% in respect of the inputs which were utilised in the manufacture of goods cleared at nil rate of duty. Under the law, they are entitled to adjustment of this amount. It also remains undisputed that, after crossing the limit, they cleared the goods on payment of duty. They crossed the exemption limit on 3/4th June, 2001. Therefore, they are entitled to the claim of Modvat credit on the inputs utilised by them in the manufacture and clearance of goods, on and after that date. The total amount of credit available to them shall be verified by the competent officer. The adjustment of the earlier amount reversed @ 8% of the value of goods cleared, is to be allowed. Therefore, demand regarding the Modvat credit will be raised by the department only thereafter. The impugned order regarding the confirmation of demand of Rs. 6,18,163/- is set aside.
7. Keeping in view the facts and circumstances and the discussion made above, we do not find it a fit case for imposition of penalty on the appellants and demand of interest from them. The impugned order in this regard is also set aside. The appeal of the appellants accordingly stands disposed of in the above terms.