Customs, Excise and Gold Tribunal - Delhi
Lml Ltd. vs Cce, Kanpur-I on 15 February, 2001
ORDER
K.K. Bhatia
1. The brief facts in the case are that the appellants manufacture scooter and parts thereof, They filed a refund claim of Rs.3,65,447.00 on 9.1.99 with the Deputy Commissioner of Central Excise, Division-II, Kanpur on the ground that they had cleared capital goods namely, "Moulds and Dies" to their job worker M/s Belmaks Automotives Ltd. on payment of duty under Rule 57S(2) of the Central Excise Rules, 1944. These moulds and dies were cleared during the period 14.7.98 to 28.8.98 by debiting the duty in their RG 23C part-II account by issuing the invoices. It is stated that they wanted to clear the said capital goods to the job worker under Rule 57S (8) without payment of duty. It is submitted that the said job worker was working under Rule 57F (4) and did not have the facility for availing modvat credit. On realising their mistake they applied to the Assistant Commissioner for granting the permission under Rule 57S (8) which was given to them on 19.3.99. They submitted that the mistake of despatch of the capital goods under a wrong rule was discovered during December, 1998 and immediately the corrective action was initiated within six months of time. They stated that the permission of the Assistant Commissioner was required under this rule for removal of the capital goods without payment of duty and the same was granted to them on 19.3.99. It is further stated they had started getting these goods back in their factory from their job worker. These submissions made by the party are considered by the Dy. Commissioner of Central Excise in his order dated 14.6.99 but he has rejected the refund claim with the observations that the goods were rightly removed as per the provisions under Rule 57S (2) on payment of duty. It is stated that the party had cleared the goods to M/s Belmaks under Rule 57S (2) between the periods from 14.7.98 to 28.8.98 and the refund claim is received in the Divisional Office after lapse of five months from the clearance of the goods under Rule 57S (2) from the factory. It is stated that as the party did not make the disclosure regarding removal of the moulds and dies already made by them to the job workers while applying for the permission under Rule 57S (8), the permission granted to them on 19.3.99 under Rule 57S (8) was reviewed and the same was withdrawn vide letter dated 14.6.99. With these observations, the Dy. Commissioner has rejected the refund claim of the party. The party filed an appeal but the Commissioner (Appeals), Ghaziabad vide his order dated 16.2.2000 dismissed the appeal of the party with the following observations :-
"I have gone through the case records and considered the submission of the appellant. There is provision under Rule 57S (8) for clearance of Moulds and Dies without payment of duty, to a job worker subject to the permission of proper officer and such terms and condition imposed by him. I find that the appellant had already cleared the capital goods under Rule 57S (2) on payment of duty therefore question of grant of permission for removal of already cleared goods under Rule 57S (8) does not arise. Further there is no provision under Rule 57S (8) to grant the permission post facto. It is also true that there was no mention in the application for permission under Rule 57S (8) that the inputs raw materials for which permission under Rule 57S (8) is being sought for, has already been removed by them under Rule 57S (2). Hence Dy. Commr. has rightly reviewed his order of permission dt. 19.3.99 and withdrawn the same and also rejected the refund claim accordingly."
2. The present appeal is against the above order of the Commissioner (Appeals). I have heard Sh. R. Santhanam, Advocate for the appellants and Sh. A.K. Jain, JDR for the respondents. The ld. Advocate for the appellants laid great emphasis on the fact that the mould and dies were sent to their job worker as capital goods and they were permitted to be cleared and brought back without payment of duty under the provisions of Rule 57S (8). It is stated that though the permission as required under the Rule for sending out these goods was not obtained. The same was however applied for and also given subsequently but it was withdrawn without giving them any opportunity to explain their case. In this regard, the ld. Advocate relied on the decision of the Larger Bench of the CEGAT in the case of Piaggio Greaves Vehicles Ltd. Vs. CCE, Pune-I [2001 (127) ELT 614 (Tri-LB)]. Sh. A.K. Jain, JDR for the respondents reiterated the findings arrived at by the original authority as well as Collector (Appeals) in their respective orders.
3. I have considered the submissions made before me. As can be seen from the above, the appellants have filed the refund claims for the duty paid on sending the mould and dies to their job worker under the provisions of Rule 57S (2) which they say was not required to be paid since they were entitled to clear and receive them back without payment of duty under the provisions of Rule 57S (8). The relevant provisions under Rule 57S as existed at the relevant time are re-produced below:-
(8) Notwithstanding anything contained in sub-rule (1), a manufacturer may, with the permission of the Commissioner and subject to such terms and conditions and limitations as he may impose, remove the moulds and dies, without payment of duty, to a job-worker for the purpose of production of goods on his behalf and according to his specifications.
(9) The Commissioner shall not permit a manufacturer to remove the moulds and dies under sub-rule (8) unless the manufacturer undertakes to bring back the said moulds and dies and the goods so manufactured, within a period of three months from the date of their removal or such extended period as the Commissioner may permit.
(10) In case where moulds and dies removed under sub-rule 8 are not received back within a period of there months from the date of removal of such moulds and dies or within such extended period as the Commissioner may permit, duty shall be paid equivalent to the credit taken on the said moulds and dies.
4. The appellants are not disputing that they were required to obtain the permission of the Assistant Commissioner for sending out the mould and dies to their job worker without payment of duty which admittedly was not obtained. They say, on realising their mistake, they applied for the same which was also granted but subsequently withdrawn without affording them any opportunity. As can be seen from the above provisions of the rules, they not only stipulated for the permission of the Assistant Commissioner for sending the impugned goods out without payment of duty but such permission would also have entailed such terms, conditions and limitations as that authority may have imposed as a condition for the permission. Obviously while applying for such permission, the appellants did not disclose to the Assistant Commissioner that the mould and dies for which the permission was being sought had already been sent out on payment of duty. Consequently no fault could be found with the Assistant Commissioner for withdrawing the permission on his coming to know of the facts. Further the above provisions also stipulated that the mould and dies should have been received back within a period of three months from the date of removal or within such extended period as may be permitted and in the event of the failure of the same the duty equivalent to the credit taken on the said mould and dies shall be paid. Admittedly, the mould and dies were not received back within the prescribed period of three months and further since they were removed without even applying to the Assistant Commissioner, the question of extending this period would not arise. on critical examination of the facts under consideration, therefore, it is observed that none of the conditions stipulated under the provisions of these rules have been complied with and, therefore the concession under these provisions cannot be extended to the appellants. The goods have rightly been cleared on payment of duty and conequently the appellants are not entitled to the refund of the amount claimed by them. The case law in Piaggio Greaves Vehicles Ltd. (supra) is not relevant to the facts of the present case since in that case the provisions of clause (8) to clause (10) of Rules 57S were strictly complied with and accordingly the Tribunal held that the modvat credit was admissible to the appellants.
5. The appeal fails and the same is rejected.