Customs, Excise and Gold Tribunal - Calcutta
M/S Swil Limited vs C.C.E., Calcutta-Iv on 11 July, 2001
ORDER
Archana Wadhwa
1. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Copper Alloy Wire. The said goods were originally exported by the appellants to the extent of 12,500 kgs. under the B-1 Bond without payment of central excise duty. Inasmuch as the goods were not accepted by their foreign customers, the same were returned back to the appellants for reprocessing and repairing and sending back to their customers. The appellants sought permission form the commissioner of Central Excise for reimport of the said goods which was granted vide his letter dated 5.6.97. Inasmuch as the goods were reimported after a period of one year the appellants paid countervailing duty to the tune of Rs. 3,73,701.97 and brought the goods into their factory for reprocessing. After reprocessing the goods were returned to their foreign customers after observing all the Central Excise formalities.
2. The dispute in the present appeal relates to the Modvat credit of the said countervailing duty paid by the appellants at the time of reimport of the goods in question. Whereas the Revenue's contention is that the said final product received by the appellants cannot be treated as an input in the manufacture of their final product in terms of the provisions of Rule 57A, Modvat credit of duty so paid will not be available to them. On the other hand the appellant's contention is that the said goods were reprocessed in their factory and as such the credit of countervailing duty paid by them is available. For the above proposal Shri B.N. Chattopadhaya, Consultant appearing for the appellants refers to the following decisions:
a) C.C.E., Meerut vs. Bhushan Steel & Strips Ltd. - 2000 (39) RLT 200 (CEGAT-LB)
b) C.C.E., Meerut vs. Tin Manufacturing Co.- 2000 (39) RLT 197 (CEGAT-LB)
c) Hindalco Industries Ltd. v. C.C.E., Allahabad - 2000 (38) RLT 986 (CEGAT-LB).
After giving my careful consideration to the issue involved I find that the Larger Bench of the Tribunal in the case of Hindalco Industries Ltd. while taking note of the Board's Circular No. 263/45/89-CX8 dated 7.8.89 has held that the defective/rejected final products returned to the assessee and used again in the manufacture of final products are eligible inputs for the purpose of Modvat credit. To the same effect are the other two Larger Bench decisions relied upon by the appellants. As such taking note of the ratio laid down in the said decision I set aside the impugned order and allow the appeal with consequential relief to the appellants.
(Pronounced)