Customs, Excise and Gold Tribunal - Mumbai
Beekaylan Synthetics Ltd. vs Commissioner Of Central Excise on 7 November, 2005
ORDER T.V. Sairam, Member (T)
1. This is an appeal filed by the appellants who are engaged in the manufacture of Texturised Polyster Filament Yarn against the Commissioner (Appeals) Order dated 28-11-2003.
2. In brief, the appellants had availed Modvat Credit on dyeing plant on 30-5-97 amounting to Rs. 3,90,000/-. However, w.e.f. 9-6-97 they filed a declaration for availing the concessional rate under Notification No. 4/97, dated 1-3-97 (as amended by Notification No. 19/97, dated 11-4-97 and 34/97, dated 6-6-97).
3. As the condition No. 15C(ii) of Notification No. 34/97 foresees no availment of credit under Rule 57A or 57Q of Central Excise Rules, a show cause notice was issued to them, which was later adjudicated by Dy. Commissioner of Central Excise demanding the said amount under Rule 57U besides imposing penalty under Rules 173Q and demanding interest under Section 11AA.
4. Aggrieved by this order, the Appellants filed an appeal before Commissioner (Appeals) who vide his order dated 28-11-2003 reduced the quantum of penalty. Not satisfied with this, they have now come to the Tribunal.
5. It was argued that the availment of Capital goods Credit cannot be denied on account of alleged non-entitlement of benefit of Exemption Notification No. 4/97. The availment of Capital goods Credit was governed by the provisions of Rule 57Q and there was no restriction in the said Rule for denial of Credit. Further, according to them, the Commissioner (Appeals) has failed to appreciate that the Capital goods Modvat Credit was issued prior to the issue of amending Notification No. 34/97, dated 6-6-97, and hence, the allegation made in the show cause notice was not applicable. It was also pointed out that the department could have denied them the benefit of Notification, instead of questioning the availment of the Modvat Credit which was correctly taken by them and much before the birth of the said amending Notification. Learned Advocate contends that after the amendment of the Notification the appellants are not utilizing the Credit which they had availed and that they are also paying for their clearances from PLA.
6. Learned Jt. C.D.R. reiterates that the appellants are not entitled for the benefit of exemption available under Notification No. 4/97 as amended.
7. I have examined the case record and heard both sides. In the present case the appellants had availed Capital goods Modvat Credit much before the amendment of the present Notification No. 4/97 and thus they are not at all at fault for availing the same. Now that the subsequent amendment made in the notification envisages the condition that to avail the exemption they cannot avail the Modvat Credit has given rise to the present issue. It has been forcefully argued by the learned Advocate that instead of denying the exemption under the said notification, the department has been asking them to reverse the Credit already taken by them. It appears that there is strength in their arguments, particularly, since they had availed the Credit much before the condition of the notification got subsequently amended and that they have stated that they are currently paying for their clearances from PLA. I, therefore, do not find any merit in the orders passed by the lower authorities. In the result, I set aside the impugned Order and the order of the adjudicating authority, allowing consequential relief to the Appellants.
(Dictated and pronounced in the Open Court.)