Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Union Carbide India Ltd. on 2 February, 1998
Equivalent citations: 1999(65)ECC307, 1999(111)ELT577(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. This is a reference application filed by the department. In para 8 of the reference application, following four questions were enumerated :-
(i) As per Rule 57D(1) credit of specified duty can be allowed in respect of any inputs contained in any waste, refuse or by product arising during the manufacture of final product. However, in the instant case, the waste and scrap have not arisen in the course of manufacture of the finished product viz. dry cell batteries, but finished batteries have came into existence and the rejected dry cell batteries are nothing but rejects of final products and in no way can be considered as waste and scrap arising during the manufacture of final product.
Whether, therefore, the Tribunal is correct in overlooking the provisions of Rule 57D(4), and extending the Modvat credit,
(ii) CEGAT, Eastern Regional Bench, Calcutta in their final order No. A-101/Cal./94, dated 3-2-1994 while discussing the matter in the light of Section 2(f) and Departmental instructions specifying RG-1 point of 'dry cell battery', decided that till final test and approval, the process of manufacture of dry cell battery was not complete and so Rule 57D(1) was applicable on rejected dry cell batteries.
But perusal of Para 2,5 Page 31 of supplement to the departmental instruction on Electric Batteries (enclosed) which reads as, stage at which the Electric Batteries and parts are to be treated as manufactured for the purpose of accounting in 'RG Y, will reveal that the word 'manufactured' used here is connoted to the accounting of RG 1. This means, manufacture of batteries is completed well before RG 1 stage. The RG 1 stage and manufacturing stage in the case of dry cell batteries are two complete different stages.
Whether, therefore, the Tribunal has not erred in differentiating the manufacturing stage and RG 1 stage.
(iii) The above contention also finds support from the case of Collector v. General Cement Products 1989 (39) E.L.T. 689 (Tribunal) where Honourable CEGAT observed that quality control test should be considered a part of manufacture only when such test was mandatory. In the instant case the assessee did not claim the test as mandatory.
Therefore, if the above interpretation of finished/final product in the present context and in the light of Section 2(f) and Rule 57 D(1) is held as correct and legal, Tribunal's aforesaid final order does not appear to be correct and legal.
(iv) Whether the Tribunal is correct in following the Eastern Regional Bench's decision even after it was pointed out that the said Tribunal Order was not accepted and the Department is proceeding on appeal against the said order of the Tribunal.
2. It is now seen that the decision of this Tribunal was based on the decision of the East Regional Bench reported in 1994 (74) E.L.T. 381. This decision was rendered by the East Zone Bench in the year 1994 itself. In the ground urged by the department, it is stated that this decision is not accepted by the department and the department has proceeded on appeal.
3. The ld. JDR Shri Ravinder Saroop stated that he would like to know as to whether any appeal could have been filed and thereafter the matter may be decided on merits.
4. Heard the ld. Advocate Shri Nasser Abdullah for the respondents.
5. We have considered the submissions. We find that the decision was based on the decision of the East Regional Bench which was reported in 1994 (74) E.L.T. 381. The matter involved in this case is with respect to the Modvat credit in terms of Rule 57D(1). It is clear that since no rate of duty or any valuation for purposes of assessment is dealt with by the Tribunal no appeal lies. If at all, it is only a reference application which is permissible. Therefore, the ground mentioned in the application that an appeal was filed has not reflected the true state of affairs.
6. The ld. JDR reiterated the grounds mentioned with respect to questions of law.
7. We find that 4 years have passed after the decision of the East Regional Bench and the department could not have filed an appeal against this decision. There is also nothing on record to show that there was any reference application which was allowed by the High Court. There is no such pleading in the application that any reference application is filed against the decision of the ERB. The mere fact that the department has not accepted the decision as mentioned in the application is not the ground to hold the points of law as arisen. The decisions of the Tribunal are binding on the lower authorities. The question of acceptance or otherwise is immaterial. The question is whether any reference application has been filed against this decision. There is no such averment that any such application is filed and the matter is dealt with by the High Court. In this view of the matter, we see no reason to refer the questions. Accordingly, this application is dismissed.