Customs, Excise and Gold Tribunal - Delhi
Metro Tyres Ltd. vs Commissioner Of Central Excise on 5 June, 1997
Equivalent citations: 1997(95)ELT298(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is a stay application filed w.r.t. the order-in-appeal passed by Commissioner (A) dated 31-3-1997.
2. Ld. Counsel stated that in this case the appellants manufacture inter alia moped chains and cycle chains.
3. They take Modvat credit on declared inputs for utilisation towards payment of duty on declared output. In respect of moped chains which were exported they could not utilise the full credit and therefore they utilised a part of it for payment of duty on waste and scrap generated during the manufacture of cycle chains which were cleared for home consumption.
4. The department considered that in terms of Rule 57F(4) read with proviso (1) thereof such availment of credit was not permissible and therefore, the A.C. directed reversal of credit and also imposed penalty.
5. The Commissioner confirmed the order regarding denial of Modvat credit and waived the penalty.
6. It was their submission that their action was fully covered by Rule 57F(4) and proviso (1) relied upon by the department was not applicable to their case. Thus Sub-rule (4) has three sub-clauses and their case is covered by Sub-clause which relates to the waste arising in the course of manufacture of the final product. There is no dispute about the facts namely that the inputs had been declared and they were eligible to utilise the duty paid on them towards the payment of declared final products and the whole issue relates to only availment of the benefit w.r.t. the waste as aforesaid.
7. It was their submission that proviso (1) relates to the final products which are cleared for export under bond or on payment or duty or in the production and does not relate to the question of payment of duty on the waste. Therefore, they have got a prima facie strong case and there was no cause for raising and confirming the demand.
8. Ld. DR drew attention towards the impugned orders and reiterated the department's view point. I have considered the above submissions. I observe that prima facie there is some force in the arguments of the ld. Counsel inasmuch as this proviso which has been relied upon does not appear to refer to the waste generated during the process of manufacture.
9. Proviso (2) in fact allows even payment of refund in respect of goods subject to the conditions specified therein but insofar as the waste is concerned reading Sub-rules 57F(4) and 57F(5) would only go to show prima facie that all that is required is that duty should be paid in case such waste or material could be shown as an excisable product which was dutiable. The manner of discharge of duty liability could only be considered in terms of Rule 57A with 57F since all the Modvat provisions and rules have to be read together to get a complete picture and unless it could be shown prima facie that there was a direction to pay from PLA or otherwise then through RG 23, the case would prima facie appear to be none in the favour of the appellants.
10. I also notice that the ld. Commissioner (A) has himself observed that no mala fide appears to be there on the part of the appellants. In the circumstances, I consider it appropriate to waive the pre-deposit of the amount and stay recovery thereof subject to the appellants giving a personal bond to the satisfaction of the ld. Commissioner within eight weeks from the date of receipt of this order. To come up for reporting compliance on 12th Sep., 1997.