Customs, Excise and Gold Tribunal - Mumbai
Systematic Steel Inds. Ltd. vs Commissioner Of Central Excise on 17 February, 2005
Equivalent citations: 2005(191)ELT663(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. The appeal arose out of the order of the Commissioner of Central Excise Vapi.
2. The appellant paid duty on the galvanized CRCA Strips, taking MODVAT Credit of duty paid on the strips. The Department accepted such payment of duty during the relevant time holding that galvanization of duty paid strips amounted to manufacture. Later it was held that such process does not amount to manufacture therefore no duty is liable to be paid an galvanized strips. The Commissioner in the impugned order held that the appellant was not entitled to take MODVAT Credit amounting to Rs. 3,86,69,236/- of the duty passed on the inputs i.e. CRCA Strips, as the final product namely galvanized strips was held to be not excisable. He also imposed a penalty of Rs. 5,000/-. Hence the appeal.
3. Heard both sides.
4. This Tribunal in the case of PSL Holdings Ltd. v. Commissioner of Central Excise, Rajkot 2003 (156) ELT 602 (Tri-Mum) held that when duty was paid on the final product an assessee is entitled to take MODVAT / CENVAT Credit of duty paid on the inputs used in the manufacture of the final dutiable product. Simply because it was later held that the final product was not dutiable, reversal of credit cannot be ordered. The Department accepted the duty on the allegedly non-dutiable goods. It therefore cannot deny credit taken on the inputs that were used in the manufacture of such non-dutiable goods on which duty was however paid. The Tribunal held the same view in Vinayak Industries v. CCE Rajakot, 2003 (159) ELT 456 (Tri-Mum).
4. The appeal is allowed. The order of the Commissioner is set aside.