Customs, Excise and Gold Tribunal - Mumbai
M/S. Universal Capsules Limited vs Commissioner Of Central Excise & ... on 9 February, 2001
ORDER G.N. Srinivasan, Member (J)
1. Today an application for stay has been posted. The appellants are manufacturing hard gelatin capsules shell I.P. of various sizes falling under heading 96.02 of the schedule to the Central Excise Tariff Act. The said gelatine capsule shell are used in pharmaceutical industry. The appellants were taking the benefit of modvat on capital goods and they filed proper declaration under rule 57T. By the order-in-original in disposing of a show cause notice dated 4.2.1998 the adjudicating authority confirmed the duty of Rs. 5,86,622/- and imposed a penalty of Rs. 1,00,000/-. An appeal was filed and in the appellate order which is impugned before me the appellate authority has held as follows:-
"Regarding items shown at Sr.No. 11 & 28 are concerned lower authority held that entry also excludes "compressors" of chapter heading 8414 as such credit availed against Sr.Nos.11 & 28 is denied. Item No. 11 is "Fabricated Panel G.L. panels for Fan Assembly" and items at Sr.No.28 is "Air Compressor". Appellants say that "Fabricated panels/G.L. panels for fan assembly" falling under CSH 8414.99 being a part of machinery and are not excluded from the operation of Rule 57Q. Further regarding "air compressor" falling under CSH 8414.99. They say that only those compressors which are used in refrigerating and air conditioning appliances are excluded. They say that air compressors used by them are not used for air conditioning or refrigerating appliances and hence the denial of credit on this items is not justified. I find that there is a force in the appellants argument. Lower authority has not specifically mentioned that compressors are used for air conditioning and/or refrigerating purposes. Since the lower authority has not passed a speaking order regarding the non eligibility of credit under Rule 57Q for the products shown at Sr.No. 11 & 28. I am left with no alternative but to remand the case back for denovo adjudication. In reply to the SCN also appellants had given the same use as stated above for item shown at Sr. No. 11. Lower authority should verify the actual use of the product and after following the principles of natural justice pass a speaking order. As such I set aside the lower authority's order in case of confirmation of demand in case of items shown at Sr. No. 11 & 28 only.
Accordingly appeal is allowed by way of remand for the items shown at Sr. No. 11 & 28 only."
2. As far as penalty is concerned they have deposited Rs. 20,000/- which has been referred to in the appellate order. Since the duty element in respect of items 11 & 28 is doubted and it has been remanded, levy of penalty will depend upon the dutiability of those items. I therefore set aside the levy of penalty after hearing both parties before me and remand the matter back to the adjudicating authority for levy of penalty at the time of re-adjudication. Appeal stands disposed of on the above terms. In view thereof, the stay petition also stands disposed of.
(Dictated in Court)