Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs Flex Laminators on 9 May, 2000
Equivalent citations: 2000(120)ELT114(TRI-DEL)
ORDER A.C.C. Unni, Member (J)
1. These are two Revenue appeals against the Order-in-Original No. 220-CE/MRT/99, dated 31-3-1999 passed by the Commissioner (Appeals) Central Excise Ghaziabad rejecting the Revenue Appeal against the Order-in-Original passed by the Asistant Commissioner.
2. Arguing the appeal Shri Sumit K. Das, ld. JDR contends that the claim of the respondents that there was only one manufacturing unit, which had been upheld by the authorities below was not correct. The allegation against respondents herein was that they had availed of Modvat credit without having proper duty paying documents inasmuch as the documents were not in the name of M/s. Flex Laminators, the manufacturers of excisable goods viz., articles of plastic falling under Chapter 39 of the Central Excise Tariff 1985. The Department's case was that the duty paying documents contain no endorsement by the original consignee of the inputs, viz. M/s. Flex Industries, in favour of the manufacturing unit and therefore Modvat credit claimed by the manufacturing unit was not admissible and was recoverable from the respondents. Ld. JDR has argued that though the Order-in-Appeal mentions that both the units were separately registered, no separate RG 23 A Part I or RG 23 A Part II registers were maintained. There was infact no segregation of inputs received by the two manufacturing units. In terms of Rule 57 GG any unit claiming modvat credit needs to be registered. It is contended by the Department, that where a third party receives duty paid inputs, an endorsement to that effect for full or part of the consignment has to be made in favour of the unit which actually consumes dutiable inputs, although the recipient company may be other than the manufacturing unit. According to the Department, this inbuilt mechanism is provided in the Modvat Rules for proper accountal and for further use of inputs in the manufacture of the finished products. Only then a manufacturer can avail of the modvat credit. Since in the instant case segregation of accounts had not been made, credit claimed ought not to have been allowed.
3. Appearing for the respondents Shri A.K. Jain, Deputy Chief Manager in the respondent firm has submitted that the appeal has been filed on the basis of a wrong assumption that both M/s. Flex Industries Ltd. and M/s. Flex Laminators were manufacturing units. There is nothing on record to show that this was the factual position nor have the authorities below given any such finding in their orders. The factual position was that there were initially two companies registered under the Companies Act and one of the companies M/s. Flex Laminators Ltd. were holders of Central Excise Licence. In 1988 Flex Laminators Ltd. merged with Flex Industries Ltd. under the orders of Delhi High Court. The Head Office of Flex Industries Ltd. was situated within the premises of the manufacturing unit and referred to as 'Flex Industries - 2'. Since the head office and the manufacturing unit were in the same premises, there was no question of endorsement of invoices received in the name of M/s. Flex Industries as consignee. This position had been taken note of by the authorities below while considering the modvat credit claim of Flex Laminators -2. The Assistant Commissioner had dropped the show cause notice proposing recovery of the Modvat credit on the above facts which had been confirmed by the first appellate authority. Representative of the respondent firm therefore pleaded for rejecting the two appeals filed by the Department and for confirmation of the impugned order.
4. We have considered the submissions of both sides and have perused the records. We are unable to find any supporting evidence to substantiate the averment in the grounds of appeal that both the units M/s. Flex Industries Ltd. and M/s. Flex Laminators - 2 were manufacturers of laminated pouches. We agree with the observations in the Assistant Commissioner's order that mentioning the name of M/s. Rex Industries Ltd. on the duty paying documents in respect of M/s. Flex Laminators - 2 would not be a ground for denying the modvat credit since it was evident on record that Flex Laminators -2 was only a unit of M/s. Flex Industries Ltd. and the address of both the company as well as the manufacturing unit was the same.
5. Both the appeals are accordingly rejected.