Customs, Excise and Gold Tribunal - Tamil Nadu
Spic (Hcd) Ltd. vs Cce on 4 May, 2006
Equivalent citations: 2006(111)ECC400, 2006ECR400(TRI.-CHENNAI), 2006(201)ELT386(TRI-CHENNAI)
ORDER P. Karthikeyan, Member (T)
1. M/s SPIC (HCD) had taken credit of the duty paid by its job workers on repaired/processed transformer oil and the transformer. The original authority confirmed the demand of the credit to the extent of Rs. 1,83,966/- availed by M/s SPIC (HCD) under Rule 57U of the Central Excise Rules, 1944. The original authority had held that the job workers were not required to pay duty on the repaired/reconditioned capital goods received by them under Rule 57S while returning them to the appellant manufacturer who had originally availed credit of duty paid on the same. He had held that M/s SPIC (HCD) were not eligible for the credit of duty paid by the job workers. The Commissioner (Appeals) in his order dated 19.2.01 upheld the order of the lower authority on the same ground.
2. Shri S. Ignatius, learned Counsel appeared for the appellants and argued that Central Excise Officers having jurisdiction over M/s SPIC (HCD) were not competent to revise the assessment appearing on the invoice covering the goods received by it. He cited the order of the Mumbai Bench of the Tribunal in the case of Owens Bilt Lt. v. CCE, Pune as per the ratio of which SPIC (HCD) was entitled to take credit of the duty paid by the job worker irrespective of the fact whether the job worker was required to pay duty or not.
3. Smt R. Bhagyadevi, learned SDR reiterated the reasoning contained in the impugned order.
4. We have considered the rival submissions. It is observed that the appellant had received the goods and had taken credit of the duty paid on those goods which had been sent under 52A invoices. The Commissioner having jurisdiction over the appellant's unit cannot revise or restrict the credit admissible to the appellant who received the goods on payment of duty under cover of prescribed statutory documents. Therefore, the impugned order demanding credit of duty availed by the appellant, of the duty paid on the goods received by it, after repair/reconditioning is not sustainable. We also find that the Tribunal in Kerala State Electronic Corporation v. CCE, Kochi, held that "the recipient of the input was entitled to take Modvat credit of the duty paid on the inputs received by it, and credit could not be restricted by the authority having jurisdiction over the recipient of the inputs on the ground that the duty paid was in excess of the duty actually payable". This observation applies mutatis mutandis to capital goods credit as well. The assessee had worked out duty liability on the processed oil with reference to the quantity of used oil received for processing. As there was no shortage in the oil received by the appellant compared to the quantity of processed oil cleared by the job worker on payment of duty, the observation of the lower authorities that the appellant was eligible for a lower credit owing to the oil lost in process is not maintainable. In the circumstances, the appeal is allowed and the impugned order is set aside.
(operative portion of this order was pronounced in the open Court on 4.5.06)