Customs, Excise and Gold Tribunal - Mumbai
Standard Alkalies Ltd. And Shri P.K. ... vs Commissioner Of Cen. Excise on 10 November, 2003
ORDER Jyoti Balasundaram, Member (J)
1. The appellants herein imported goods assembled as DG sets paying duty at the appropriate rates. The rate of duly on fully assembled DG sets was less than that was leviable on parts thereof. The appellants took modvat credit of the CVD paid at the time of importation of such goods. Central Excise Authorities were of the view that the goods were DG sets in CKD condition and therefore duty at the rate applicable to DG sets should have been paid and modvat credit availed only to that extent. Show cause notice for the recovery of modvat credit allegedly availed in excess was issued; the notice was adjudicated by the Commissioner of Central Excise, Mumbai, who upheld the charge in the notice by disallowing modvat credit and ordered recovery of Rs. 88,27,297/- and also imposed penalty of Rs. 12,79,213/- on the importer under Rule 57U read with Rule 173Q against inadmissible modvat credit availed during the period subsequent to 23.7.96 and also imposed a penalty of Rs. 20 lakhs on the importer under Rule 173Q against inadmissible credit availed during the period prior to 23.7.96. He also imposed penalty of Rs. One lakh upon the Manager of the importer company. Hence these appeals.
2. We have heard both sides. We find that Bills of Entry filed for the goods were assessed at the rate of duty applicable to individual components of DG sets. These assessments have not been disturbed. We also find that the credit has been taken to the extent of duty paid on such assessments. It is not open to the Central Excise Authorities to sit in judgment over the assessments effected by the Customs Authorities. We also note that as per the modvat credit scheme, amount of duty paid on the inputs is available as credit at the time of payment of duty on the final product, and thus where the duty is paid at the higher rate (as applicable to parts and components of DG sets) there cannot be any objection to availment of equipment amount of credit by the importers. In other words, the entire exercise is revenue neutral.
3. In the light of the above discussion, we hold that the appellant have rightly availed of the modvat credit of amount in question. Hence, we set aside the impugned order and allow the appeals.
(Dictated in Court)