Customs, Excise and Gold Tribunal - Delhi
M/S. Bhiwani Textile Mills vs Cce, Delhi on 14 March, 2001
ORDER
K.K. Bhatia
1. The matter under consideration in these appeals is the availability of modvat credit on the item namely Blowing Wrapper Cloth, whether under Rule 57A as input material or under Rule 57Q as capital goods. The appellants are the manufacturers of man made fabrics falling under chapter No.55. The Assistant Commissioner of Central Excise Rohtak vide his orders dated 27.8.98 and 31.8.98 has denied the modvat credit of Rs. 87344/- and Rs. 1,67,552/- on this item to the appellants under Rule 57I and Rule 57 U of the Central Excise Rules, 1944 respectively. The original authority has further imposed a penalty of Rs. 5000/- under Rule 173Q for contravening the Rule 57 A and a penalty of Rs. 10,000/- unders the same rule for contravening Rule 57Q respectively on the appellants in his above stated two orders.
2. The party filed appeals against the above orders of the original authority and the Commissioner (Appeals) vide her combined order dated 8.2.2000 rejected both the appeals of the party with the following observations:
"I have gone through the records of the case very carefylly, I observe that as fabrics of cotton or man made fibres were not 'final products' under Rule 57A and anything going into the manufacture of these goods did not qualify as 'inputs' under the provision of Rule 57A. Accordingly, even though there is no denial of the fact that the subject blowing wrapper cloth is used in the manufacture of the fabrics, the same would not qualify for modvat credit under Rule 57 A as it is not an 'input' for the purpose of this Rule. This wrapping cloth also does not qualify as components, spares or accessories of the kier dicatizing machine going by the usage of the fabric given by the appellants and thus would not qualify for modvat credit under Rule 57Q also. Accordingly, I uphold the Orders disallowing the modvat credit on blowing wrapper cloth and dismiss the appealss."
3. The present appeal is against the above order of Commissioner (Appeals). The appellants are not represented inspite of the notice sent to them. Shri K.K. Anand, Adv. for the appellant has sent a letter at 13.12.2000 in which it is stated he has been called for some ungent work therefore an adjournment may be granted. It is observed from the records that this matter is adjourned earlier on four occassions for some or the other reasons. I am therefore not inclined to grant any further adjournment. I have heard Shri Swatantra Kumar, JDR for the respondents. He states that as per the findings in para-13 of the Larger Bench decision in the case of CE,Indore Vs Surya Roshni reported in 2001(128) ELT 293(T LB), the goods which are claimed as inputs cannot get modvat credit as capital goods. The appellants in their written memorandum of appeal have contested the findings of Commissioner (Appeals) that man made fabrics are not'final products' under Rule 57A and that anything going into the manufacture of these goods, did not qualify as 'inputs' under the provisions of Rule 57A and 57Q. I have considered these submissions. I find that it was never the case of the Revenue that the product manufactured by the appellants were not specified as final products under Rule 57 A and Rule 57Q. therefore, denying the modvat credit to the appellants on these grounds is misconceived. It is further observed that original authority in none of his two orders has given any clear findings with regard to claim of the party for availing the modvat credit under the provisions of Rule 57A. He has only rejected their claim for availing the modvat credit under Rule 57Q. In this view of the matter, the orders of the original authority are non speaking and without adequate consideration. Under the circumstances I set aside the orders passed by the lower authority and remand the matter to the original authority for consideration of the availability of modvat credit to the party on the item "Blowing Wrapper Cloth" as inputs under Rule 57 A.
4. As rightly contended by the Ld. JDR for the Revenue, the party shall not be entitled to the modvat credit on this item under Rule 57Q as capital goods, since they never claimed the modvat credit on this item under this Rule. The appellants claim the modvat credit on the item BRC under Rule 57A as input for the period 23.10.97 to 3.3.98. The amount involved for this period is Rs. 87344/-. It is observed that the original authority in his order dated 27.8.98 covering this period has given findings only with regard to the availability of credit under Rule 57Q. This order of the original authority therefore, is misconceived. The findings of the Commissioner (Appeals) that final products manufactured by the appellants were not specified under Rule 57A are also not relevant to the proceedings since no such findings are given by the Original authority in his order. Similarly the findings of the original authority in his order dated 31.1.98 denying the modvat credit to this item under Rule 57Q would call for reconsideration. The parameters of availability of modvat credit on capital goods have finaly been laid in the Larger Bench decision of CEGAT in the case of CCE Indore, Surya Roshni reported in 2001(128) ELT 293(T. LB). In view that no adequate consideration is bestowed to the matter by the lower authority, the order appeal against is set aside and the matter is remanded to the original authority for reconsideration as to whether the modvat credit on the impugned item shall be available to the party as follows:
Sl. No Period Amount (Rs) Under Rule
1. 18.11.96 to 21.3.97 81,299.00 57Q
2. 17.5.97 to 22.8.97 80,253.0057 Q
3. 23.10.97 to 3.3.98 87,244.00 57 A
5. The appellants shall be afforded reasonable opportunity to state their case before taking final view in the matter.
6. The appeals (SIC) are disposed of by remand in above terms.