Customs, Excise and Gold Tribunal - Calcutta
India Foils Ltd. (Erstwhile Light Metal ... vs Commissioner Of Central Excise on 29 January, 2003
Equivalent citations: 2003(88)ECC261
JUDGMENT Archana Wadhwa, Member (J)
1. After dispensing with the condition of predeposit of duty, I take up the appeal itself with the consent of both sides, as the issue is covered by the Larger Bench decision of the Tribunal.
2. The appellants were issued a show cause notice proposing to deny the MODVAT Credit in respect of the rejected and damaged final product received back by them from their customers. The allegations in the show cause notice is that since they are remaking, refining and reconditioning the said final product, they should have followed the procedure under the provisions of Rule 173H or L. On adjudication, the Assistant Commissioner dropped the proceedings against the appellant company by relying upon the Tribunal's decision in the case of Alcobex Metal Limited, 1993 (68) ELT 290. He observed that as the appellants had filed the declaration under Rule 57G and treated the said final product as input and had converted the same into Aluminium Rolled Sheet i.e. the final product, the Rejected Aluminium Sheet has to be treated as input.
3. Being aggrieved with the said Order, the Revenue filed an appeal before the Commissioner(Appeals) who reversed the Order of the Assistant Commissioner. Hence the present appeal.
4. I have heard Shri B.K. Munshi, learned Consultant for the appellant company and Shri N.K. Mishra, learned JDR for the Revenue.
5. It is seen from the Order of the Commissioner (Appeals) that he has not followed the Tribunal's decision in the case of Alcobex Metal Limited (referred supra), on the ground that there is no evidence on record to show that the appellants have carried out the process of manufacture on the Returned and Rejected Final Product. However, I find that the above observations made by the Commissioner are not based on any evidence and are contrary to the findings arrived at by the Assistant Commissioner, which take into consideration the factual position. It is also seen that the case made out in the show cause notice was that the provisions of Rule 173H or 173L are applicable. The said provisions are applicable only when the Returned Goods are reconditioned, refined or remade into a new product. As such, the Commissioner (Appeals) has gone beyond the basic case made out in the show cause notice by which the Revenue itself has admitted that the appellants have remade the goods into fresh ones. In these circumstances, the Commissioner (Appeals') Order cannot be sustained. I also take note of the fact that the Larger Bench of the Tribunal in the case of Commissioner of Central Excise, Meerut v. Tin Manufacturing Company, 2000 (119) ELT 290 (Tri-LB) has held that defective duty-paid final products received back by the manufacturers, have to be treated as inputs once they are used as raw materials for the manufacture of the final products. The Larger Bench has also taken into consideration the Board's Circular No. 263/45/89-CX.8 dated 7.8.89.
6. In view of the foregoing, I set aside the impugned Order passed by the Commissioner (Appeals) and allow the appeal with consequential relief to the appellants. The Stay Petition also gets disposed of.