Customs, Excise and Gold Tribunal - Delhi
Cce vs Parasrampuria Synthetics Ltd. on 11 February, 2003
Equivalent citations: 2003(87)ECC432, 2003(160)ELT503(TRI-DEL)
JUDGMENT V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by Revenue, is whether the benefit of exemption under Notification No. 49/94-CE (N.T.) dated 22.9.94 is available to the goods manufactured and removed by the Respondents, M/s. Parasrampuria Synthetics Ltd.
2. Shri Vikas Kumar, learned SDR, submitted that the Respondents manufacture polyethylene Terepthalate (Polyster Polymer Chips) and avail of MODVAT Credit of the duty paid on the inputs under Rule 57A of the Central Excise Rules, 1944; that a show cause notice dated 1.1.1996 was issued to them for recovering Modvat Credit wrongly taken by them and for imposing penalty is they had cleared their final product Polyster Polymer Chips at ail rate of duty against C.T-2 Certificates issued Under Notification No. 49/94-CE(N.T.); that the Asst. Commissioner under Adjudication Order No. 61/2000 dated 13.10.2000 allowed the Modvat Credit on the ground that the restriction of non-availment of Modvat Credit on inputs used in export goods envisaged under Rule 57-C is not applicable as the final products cleared for export/deemed export cannot be said to be cleared at nil rate of duty or under full exemption; that the Commissioner (Appeals) also, under the impugned Order, rejected the appeal filed by the department holding that clearances without payment of duty do not contribute clearances of goods either exempted from the whole of the duty or chargeable to nil rate of duty placing reliance on the decision in the cases of Orissa Synthetics Ltd. v. CCE, 1995 (77) ELT 350 and Reliance Industries Ltd. v. CCE, 1995 (78) ELT 595 (Tribunal). The learned SDR, further, submitted that in terms of Rule 57-C of the Central Excise Rules, 1944 at the relevant time, no Credit of the duty was to be allowed on the inputs which have been used in the manufacture of final products which are exempt from whole of the duty of Excise leviable thereon or are chargeable to nil rate of duty except in cases where the final products are cleared to a unit in Free Trade Zone/Electronic Hardware Technology Park/Software Technology Park, or to a unit which is a 100% E.O.U.; that the final goods have been cleared in the present cases to none of such units and as such provisions of Rule 57-C arc applicable and the Modvat Credit Taken by the Assessee on the inputs used in final products cleared without payment of duty is not admissible to the Respondents.
3. Countering the arguments Shri K.K. Anand, learned Advocate, submitted that the provisions of Rule 57-C are not applicable as the final goods removed by the Respondents are neither exempted from payment of whole of the duty leviable thereon nor are chargeable to nil rate of duty as the goods are cleared in terms of Notification No. 49/94-CE(NT) which is not an exemption notification; that the said notification has been issued under the provisions of Rule 13 of the Central Excise Rules, 1944 and not under Section 5A of the Central Excise Act. Reliance has been placed on the decision in the case of High-Tech Carbon v. CCE, Allahabad, 2001 (47) RLT 803 (CEGAT) and CCE, Ahmedabad v. Omkar Textile, 2002 (51) RLT 988 (CEGAT).
4. We have considered the submissions of both the sides. Rule 57-C of the Central Excise Rules provided at the relevant time that no Credit of the specified duty shall be allowed on such quantity on inputs which is used in the manufacture of final products which are exempt from the whole of the duty of Excise leviable thereon or are chargeable to nil rate of duty. It is not in dispute that the final goods have been cleared by the Respondents in terms of Notification No. 49/94 which provides removal of all the excisable goods from the place of manufacture without payment of duty for supply to manufacturers subject to the conditions specified in the Notification. The said notification has been issued in exercise of power conferred by Rule 13 of the Central Excise Rules which empowers Central Government to permit export of goods in bond without payment of duty or specified material which may be removed without payment of duty for use in the manufacture of export goods or allow removal of excisable material without payment of duty for the manufacture of export goods. As rightly contended by the learned Advocate for the Respondents the final goods are neither exempted from payment of whole of the duty of Excise leviable thereon nor they are chargeable to nil rate of duty as neither there is any exemption notification issued under the provisions of Section 5A of the Central Excise Act nor the Tariff rate specified in the Schedule to the Central Excise Tariff Act is nil in respect of final goods manufactured and cleared by the Respondents. It has been held by the Tribunal in the case of High-Tech Carbon (supra) that in respect of final products without payment of duty under Rule 13 for use in manufacture of goods to be exported, Modvat Credit of duty paid on inputs cannot be denied because clearances under Rule 13 cannot be equated with the clearances at nil rate or exempted envisaged in Rule 57-C. The Tribunal had referred to the decision in the case of Hindustan Petroleum Corporation v. CCE, 1995 (8) RLT 877 (SC) wherein it has been held that under Rule 13 of the Central Excise Rules, "liability to pay Excise duty does not vanish and goods do not become totally exempt from payment of Excise duty." Similar views were expressed in the case of Omkar Textiles (supra) wherein the goods were cleared without payment of duty under Notification No. 47/94 issued under Rule 13 for the manufacture of made-up textile articles which were for export. The Tribunal has held that since Notification No. 47/94 was issued in order to give effect to the provisions of Rule 13 and was not a notification issued under Rule 8 or Section 5A of the Act, granting exemption from duty, the provision of Rule 57-C would not have applied to the goods cleared under that notification. Following the ratio of these decisions we do not find any reason to interfere with the impugned Order. Accordingly the appeal filed by the Revenue is rejected.