Customs, Excise and Gold Tribunal - Mumbai
Maharashtra Insecticides Ltd. vs Commissioner Of Customs & Central ... on 29 January, 2003
ORDER Gowri Shankar, Member (T)
1. Appeal taken up for disposal with consent, after waiving deposit.
2. Maharashtra Insecticides Ltd., the appellant, was engaged in the process of dilution of insecticides, which it purchased in the market. In March 1994, on the impression that this process amounted to manufacture, it sought for registration of its factory, and commenced paying duty on the diluted insecticides that it cleared, utilising for this purpose the modvat credit of the duties paid on the concentrated insecticides and other goods that it used as inputs. In May of 1994, it addressed a representation to the Assistant Commissioner, contending that the process that it undertook did not result in emergence of any goods which were different from any name, character or use from the concentrated insecticides which was the starting point and the process did not amount to manufacture and hence no duty was payable on the goods that it cleared. The Additional Commissioner's orders passed in November of that year accepted this contention, with the result that the appellant was no longer required to pay duty on the goods that it make.
3. The department issued five notices to the appellant in May of 1995. The notices, commonly worded, alleged that 'modvat credit already taken and also utilised, is irregular and needs reversal" on the ground that the process undertaken by the appellant was not manufacture and no duty was required to be paid on final product. The assessee contended in reply that there is no legal requirement in its part. This contention was accepted by the Additional Commissioner in his order dated 7.5.1996. The department did not accept this order and appealed this order to the Commissioner (Appeals). In his order, which was confirmed by the Tribunal on appeal by the assessee, the Commissioner (Appeals) accepted that the reversal was acceptable. The appellant thereupon reversed a sum of Rs. 35,89,030/-. This amount was at its credit because, as a result of changes made to Chapter 38 of the tariff by the Budget of 1996-97, the process that it undertook was deemed to be manufactured, and the appellant once again paid duty on the finished goods.
4. The department issued another notice to the appellant on 15.6.1995. This notice alleged that reversal of the amount was made insufficient that the amount was required to be paid either in cash or debit to the personal ledger account. This notice was confirmed by the Additional Commissioner. The assessee's appeal was dismissed by the Commissioner (Appeals) on the ground that it was not complied with the requirement contained in the stay order that the entire amount, along with penalty, was required to be deposited. Hence this appeal.
5. It will be evident from the above narration that consequent upon the notice earlier issued to the appellant, asking to reverse the credit which had been found to be correctly shown by the Commissioner (Appeals) and the Tribunal, the appellant had in fact reversed. Whether in this situation, a fresh notice can now be issued demanding duty is debatable. Further, it is to be noticed that in real terms, the department has suffered no loss whatsoever. It has received the duty on the goods, which is not less than the credit which cannot be refunded to the applicant, since the refund is barred by limitation. On this prima facie view, we are of the opinion that the Commissioner (Appeals) must hear and dispose of the appeal without insisting on deposit.
6. The appeal is accordingly allowed and the impugned order set aside.