Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs Kinetic Motors Co. Ltd. on 10 January, 2005
Equivalent citations: 2005(183)ELT300(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. In this appeal, the Revenue has questioned the correctness of the part of the impugned order vide which the Commissioner (Appeals) has allowed the Modvat credit to the tune of Rs. 10,33,233/- on the inputs the value of which had been written off in the books of account by the respondents but were still lying in their factory premises.
2. The learned JDR has contended that since the collaboration of the respondents with M/s. Honda Motors stood terminated, the use of the inputs lying in the factory of the respondents had become impracticable and impossible and as such, they are liable to reverse the Modvat credit of the amount in question, on those inputs even if the same were lying in their factory.
3. We have heard both the sides and gone through the record.
4. We are unable to accept this contention of the learned DR for two reasons. Firstly, there is no material on record to suggest that the respondents after termination of their collaboration contract, has stopped the production of their product Two Wheelers and parts thereof. Secondly, there is no time limit fixed under Rule 57F for the utilization of the inputs by the assessee. The credit can be denied to an assessee under the rule only on two grounds, firstly for having not used the inputs in the manufacture of goods; and secondly for having removed the inputs as such. The credit cannot be denied to the assessee for having failed to utilize the inputs for a long time or for having written off the value of the inputs in the books, when those had not been removed by them from the factory as such. In the case in hand, none of the conditions laid down in Rule 57F for denying Modvat credit to the appellants, stands satisfied. Therefore, for merely writing off value of the inputs in their books, they could not be denied the credits, when inputs were still lying in their factory premises. The case, of the appellants also stands covered by the ratio of law laid down in identical case of Bharat Heavy Electricals Ltd. v. C.C.E., Bangalore [2002 (50) RLT 2081 and Hindustan Zinc Ltd. v. C.C.E., Visakhapatnam [Final Order Nos. 1625-1628/2004 dated 19-10-2004] wherein such a view has been taken.
5. In the light of the discussion made above, we do not find any illegality in the impugned order under challenge of the Commissioner (Appeals) and the same is upheld. The appeal of the Revenue is dismissed.