Collr. of C. Ex. Vs. Hindustan Safety Glass Works Ltd. - Court Judgment

Excerpt:

.....polyvinyl butyral resin sheets during the process of manufacture of laminated sheet glass in respect of which credit of additional duty paid under section 3 of the customs tariff act was taken. they claimed effective rate of duty thereon as nil under notification no. 53/88, dated 1-3-1988. according to the department, once the modvat credit is availed of, the goods in respect of which said credit has been taken cannot be considered to be duty paid particularly when notification conforms full exemption. accordingly benefit in terms of notification no. 53/88, dated 1-3-1988 has been denied by the assistant collector.on an appeal filed by the party, the collector (appeals) upheld the contention of the assessee observing that the modvat scheme is designed to meliorate the cascading incidence of excise duty on the final product to the extent of modvat availed and does not make the raw material or input as non-duty paid. while arriving at this decision, he relied upon the decision of the tribunal in the case of metrosyl jesidih industrial area v. cce reported at 1991 (53) e.l.t. 93 wherein it was held that denial of exemption on the ground of availing modvat credit under rule 57a is.....

Judgment:

1. The respondents filed a classification list in respect of their product Polyvinyl Butyral Resin Waste arising from imported Polyvinyl Butyral Resin Sheets during the process of manufacture of Laminated sheet glass in respect of which credit of additional duty paid under Section 3 of the Customs Tariff Act was taken. They claimed effective rate of duty thereon as NIL under Notification No. 53/88, dated 1-3-1988. According to the department, once the Modvat credit is availed of, the goods in respect of which said credit has been taken cannot be considered to be duty paid particularly when notification conforms full exemption. Accordingly benefit in terms of Notification No. 53/88, dated 1-3-1988 has been denied by the Assistant Collector.

On an appeal filed by the party, the Collector (Appeals) upheld the contention of the assessee observing that the Modvat scheme is designed to meliorate the cascading incidence of Excise duty on the final product to the extent of Modvat availed and does not make the raw material or input as non-duty paid. While arriving at this decision, he relied upon the decision of the Tribunal in the case of Metrosyl Jesidih Industrial Area v. CCE reported at 1991 (53) E.L.T. 93 wherein it was held that denial of exemption on the ground of availing Modvat credit under Rule 57A is not sustainable in the absence of any such prohibition or restriction in the notification and once Modvat credit is taken, the inputs do not lose the character of duty paid inputs.

2. We find that Tribunal has been consistently taking this view that duty paid character of inputs not used or of availing of Modvat credit for the, purpose of exemption notification including in the case of Metal Lamp Caps (India) Ltd. reported in 1995 (75) E.L.T. 177.

Accordingly in the absence of any prohibition or restriction in the Notification No. 53/88, dated 1-3-1988 in this regard and in view of the conspicuous absence of restriction contained in Notification No.54/88, the rationale behind Rule 57F(4)(a) cannot be imported into the Notification No. 53/88 as it was rightly observed by the Collector (Appeals) in the impugned order. Since the issue has been well considered following the ratio of the decision of the Tribunal, we do not find any infirmity in the impugned order and accordingly appeal filed by the department is hereby dismissed.