Custom, Excise & Service Tax Tribunal
Cce Mumbai I vs M/S. Tainwala Chemical & Plastics ... on 21 July, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/547/94 Mum
(Arising out of Order-in-Appeal No. GS/483/94 dated 2.5.94 passed by the Commissioner of Central Excise (Appeals), Mumbai.)
For approval and signature:
Honble Shri S.K. Gaule, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
CCE Mumbai I
:
Appellant
Versus
M/s. Tainwala Chemical & Plastics (India) Ltd.
Respondent
Appearance Shri V.K. Singh, SDR for Appellant Shri Nimesh S Mehta, Advocate for Respondents CORAM:
Shri. S.K. Gaule, Member (Technical) Date of Hearing : 21.07.2011 Date of Decision : 21.07.2011 ORDER NO.
Per S.K. Gaule Heard both sides.
2. This appeal is arising consequent to Honble Bombay High Courts order dated 14th September, 2010 wherein the Honble High Court has remanded the matter back to the Tribunal for reconsideration afresh after taking into consideration the Note Sheet duly assigned by the Addl. Commissioner (Legal & TR), Central Excise, Bombay I.
3. Briefly stated facts of the case are that the respondent is engaged in the manufacture of wet detergent tissues falling under Chapter Heading 3402.30 of Central Excise Tariff Act, 1985. The respondent took MODVAT credit on duty paid on two of its inputs namely high density polyethelene powder and homopolymer crude polypropylene falling under Chapter 39 used in the manufacture of plastic containers. The allegation of the department is that the respondent did not file a proper declaration as required under Rule 57G(2) of the Central Excise Rules, 1944 and the respondent cleared the inputs to the job workers without obtaining permission from the concerned authorities. Accordingly, proceedings were initiated against them and the lower adjudicating authority confirmed the demand of Rs.35,040/- and also imposed a penalty of Rs.1,000/- under Rule 173Q under Central Excise Rules, 1944. The respondent challenged the same before the Commissioner (Appeals). The Commissioner (Appeals) allowed the appeal and set aside the lower adjudicating authoritys order. Aggrieved by the order, the Revenue filed an appeal before this Tribunal. The Tribunal vide Order No. C-II/1165/WZB/2001 dated 26.04.2001 dismissed the Revenues appeal on the ground that the mandatory words not legal and proper were omitted in the authorization signed by the Collector in terms of Section 35B of the Central Excise Act, 1944. The department challenged the same vide Writ Petition N. 35 of 2002 and the Honble High Court of Bombay has remanded the matter back to this Tribunal.
4. The learned JDR produced a copy of the relevant Note Sheet wherein the expression not legal and proper is appearing. The learned JDR further submitted that they did not dispute the applicability of the decision of Honble High Court of Madras in case of Ponds (India) Ltd. vs. Collector of Central Excise 1993 (63) ELT 3 (Mad.). Their grievance is that in the declaration the respondent did not disclose the final product i.e. container and the respondent did not take permission for removing the goods to the job workers under Rule 57 of erstwhile Central Excise Rules, 1944.
5. The contention of the respondent is that the respondents final products are not plastic containers but wet detergent tissue papers which are clearly shown as final products in the Modvat declaration by the respondent as required under Rule 57G. In the manufacture of final products and while using packaging raw material namely polypropylene plastic containers emerges at intermediate stage as an intermediate product. It is not in dispute that these plastic containers are intermediate product and not final products. The learned Counsel further submitted that credit of duty paid on plastic granules used for making container for packing final products is admissible under Rule 57A. In support of their contention they placed reliance on the decision of Ponds (India) Ltd. (supra). They also placed reliance on the decision in the case of CCE Bangalore vs. Vijaya Seamless Containers Pvt. Ltd. 2001 (135) ELT 107 (Tri. Bang.).
6. I have considered the submissions and perused the records.
6.1 From the Note Sheet produced by the learned SDR I find that the expression not legal and correct forms part of the said note sheet. Therefore, the appeal cannot be dismissed on this count. Accordingly I proceed to decide the case on its merits. The allegation of the department is that the respondent did not disclose the final products and permission was not obtained by the respondent for removing the goods to the job workers. From the perusal of para 3 of the order-in-appeal I find that the Collector (Appeals) has found that in the definition the high density Polyethelene powder and homopolymer crude polypropylene were declared as inputs in the final product shown as detergent paper. The learned SDR pointed out that they had not declared the final product i.e. the container in the declaration under Rule 57G. In the case of Ponds (India) Ltd., (supra) the Honble High Court held that the plastic container would be treated as intermediate products and in case the duty is payable on the final products then modvat credit on the inputs used by them for final product cannot be denied. The above decision has been relied on in the Tribunals decision in the case of Commr of Cus. & CCE Mumbai III vs. Polyolefins Industries Ltd. 2001 (138) ELT 567 (Tri. Mumbai) and Vijaya Seamless Containers Pvt. Ltd. (supra). I find that it is no ones case that input in the case sent for job work were not received back. It is also no ones case that the final product were not cleared on payment of duty. Therefore, I do not find any merit in the appeal filed by the Revenue. Accordingly, the Commissioner (Appeals) order is upheld and the appeal is dismissed.
(Dictated in Court) (S.K. Gaule) Member (Technical) nsk 5