Customs, Excise and Gold Tribunal - Tamil Nadu
S.R.F. Limited vs Cce, Chennai on 12 April, 2001
ORDER
Shri S. L. Peeran
1. This is a stay application filed under the provision of Section 35 F of the Act seeking waiver of duty amount of Rs.8,92,766/- and penalty of Rs.2000/-. Appellants are manufacturers of Nylon compounded chips, Nylon Yarn, etc. They had received inputs under Rule 57F (4) of CE Rules under cover of challans specified therein for further processing and return to the supplier of their own factory from Gwalior. However, they could not process and return within 180 days as stipulated in the said Rule. Therefore, proceedings were initiated against the supplier's factory at Gwalior for recovery of duty on the inputs removed under Rule 57(4) which had not come back within 180 days. The supplier paid the duty on the said inputs which had been received by the appellants. The concerned Superintendent of Central Excise of that Range issued a certificate confirming payment of duty on the said inputs cleared under the said gate pass received by the appellants. The appellants processed the inputs and while removing the said final product, paid duty by taking Modvat credit on the basis of the certificate issued by their suppliers of the input. However, the department had initiated proceedings to recover the Modvat credit taken by them on the ground that they have irregularly availed the same against the provisions of Modvat rules 57E of CE Rules. Both the authorities have confirmed the stand initiated in terms of Show cause notice.
2. Ld. Counsel submits that in an identical situation, in the case of CCE Chennai Vs. Towers & Structurals Pvt. Ltd. as reported in [1998 (102) ELT 687-Trib.] this very bench had taken a view that the assessee was entitled to avail Modvat credit on the basis of the certificate issued by the Superintendent of supplier range on the inputs which had not come back within the stipulated period. He submits that this judgment squarely applies to the facts of the present case. He had also produced documents namely Invoice-Cum-Delivery Challan and other documents to show that they are all co-relatable with the inputs received originally under 57 F (ii) and the duty payment evidenced in the certificate issued by the Superintendent of the concerned range of the supplier of the inputs. Counsel further relies on a Division Bench judgment of this bench in the case of Inductocast Steel Foundry Vs. CCE, Bangalore [1994 (74) ELT 579 which also laid down a similar ratio in the light of several judgments of the Tribunal. Further reliance is placed on the West Regional Bench judgment rendered in the case of Dura Magnets Pvt. Ltd. Vs. CCE [1993 (64) ELT 342 (Trib.). On a specific query from the bench as to whether these judgments have been brought to the notice of the lower authorities, Ld. counsel admits that the assessee was not aware of these judgments and could not produce the same for consideration. He seeks for complete waiver and fairly he submits that the matter may be remanded to the original authority.
3. Ld. D.R. defends the order and submits that all the citations and original documents have not been placed before the original authorities. Therefore, the allegations which were brought out in the show cause notice being specific and clear were upheld by reasoned order. He submits that there is no infirmity in the order and the appellants are required to pre deposit the amounts.
4. On a prima facie consideration and on a perusal of the entire documents and judgments cited, we are of the considered opinion that the issue is fully covered in assessee's favour. Hence we grant waiver and stay of recovery of the entire amounts.
5. As the issue lies on a short compass, the counsel's plea for remand to the original authority for de novo consideration is accepted. The impugned orders are set aside and matter remanded to the original authority with a specific direction that he shall reconsider the entire pleas in the light of the rulings rendered by the Tribunal and cause due verification of the duty paying documents with regard to the input received by them and the same input having been utilised for manufacture of final product and having been cleared on payment of duty by the assessee. If all the procedures have been followed and the issue falls within the ambit of the judgments cited, then Modvat credit availed is required to be granted in the matter. The appellants shall be given full opportunity in terms of principles of natural justice and heard before a detailed order is passed.
(Pronounced & dictated in open court)