Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Pondy Chem Ltd. on 27 March, 2000
Equivalent citations: 2000(70)ECC63
ORDER V.K. Ashtana, Member (T)
1. In this Revenue appeal, it is submitted that the learned Commissioner (Appeals) in his Order-in-Appeal No. 20/98 dated 9.3.98 has erred in remanding the matter to the original authority and directing that the duty paying documents should be got verified by the original authority "before disallowing the credit".
2. Briefly, the issue concerns the clearance of solid sodium silicate by the respondents to their job workers under Rule 57F(3) for conversion into liquid sodium silicate. It is not disputed that the liquid sodium silicate so manufactured did not travel back to the present respondents factory, but was cleared for home consumption by the job workers. The respondents claimed that the job workers had paid appropriate duty when the liquid sodium silicate was cleared and that the original authority had not given them adequate time to produce the duty paying documents in proof thereof, but had proceeded to deny the Modvat credit on the inputs namely Soda Ash.
3. Learned DR. Shri S. Kannan, reiterates the grounds of appeal and submits that as per the procedure, the goods should have been returned to the present respondents. Since they were not returned to them and cleared on payment of duty from their factory, they are not eligible for utilising the credit availed earlier and therefore, the original authority has rightly reversed the same.
4. Learned Advocate Shri R. Raghavan for the respondents submits that the removal of solid sodium silicate for conversion into liquid by the job workers was as per the procedure prescribed and the challans were issued. He submits that the original authority has merely given on open remand of the matter to the lower authority on the single ground that the respondents had not been afforded an opportunity to produce the duty paying documents for the liquid sodium silicate cleared from the job workers. He submits that the original authority should have understood that since the duty paying documents had to be procured from the job workers, certain time lapse was inevitable. Instead the original authority has proceeded to confirm the demand under Rule 57I, therefore, the learned Advocate submits, there is no irregularity or error in the order of remand by the Commissioner (Appeals), who has simply directed the lower authority to first verify the genuineness and validity of these duty paying documents which are now available for inspection before applying his mind for disallowing the Modvat credit. The learned Advocate submits that nowhere in the remand has the learned Commissioner (Appeals) given any direction on the merits of the matter, therefore, the Revenue appeal is misplaced and needs to be rejected.
5.I have carefully considered the rival submissions. I have also perused the impugned order, which reads as follows:
4. I have gone through carefully the facts of the case and the submissions made by the appellants. The appellants had contended that the Sodium Silicate were cleared on payment of duty from the premises of job workers and they had submitted 4 work sheets showing the quantity of soluble glass sent to the job workers, the quantity of sodium silicate manufactured and the duty paid thereon. These facts should have been verified by the lower authority before disallowing the credit. As the documents are now available with the appellants the same can be verified with reference to the quantity of soluble glass sent, the quantity of sodium silicate manufactured and the quantity of sodium silicate cleared on payment of duty from the job workers' premises.
5. In view of the above, I set aside the order passed by the Assistant Commissioner of Central Excise, Central Excise Division, Thanjavur, for de novo consideration in the light of the above observations.
6. On a careful consideration, I find that the learned Commissioner (Appeals) has not given any direction on merits of the case and the said order impugned does not even contain a whisper regarding ultimate decision that the original authority has to take on the merits of the case. The matter has been remanded to the original authority only to afford verification of the duty paying documents submitted by the Respondents. The order prescribes that after the fact of duty paying documents has been verified by the lower authority, then only he should apply his mind regarding disallowance of the credit. I see nothing is improper or erroneous in this open remand vis-a-vis the grounds of appeal of Revenue that the credit should not be allowed. Nowhere in the order impugned, the learned Commissioner (Appeals) has given a direction to the effect that if the duty payment particulars are found to be correct, then automatically the credit should be allowed. It is merely a open remand. Therefore, I find that the Revenue appeal on the grounds noted above is misplaced and the same is rejected. It is clarified that the terms of the remand which are allowed to be continued are that after verification of the genuiness of the duty paying documents, the original authority shall be totally free to re-decide the case on merits including whether the credit should be allowed or not.