Full Judgment
application filed by them for changing the title in respect of the respondents M/s. Brook Bond Lipton (I) Ltd. consequent upon the amalgamation with Hindustan Lever Ltd. in pursuance of the Bombay High Court order dated 23-7-1996 and Calcutta High Court order dated 9-12-1996 with effect from 21-3-1997. Therefore, it was pleaded that the title should be changed accordingly. The title, therefore, is changed to M/s. Hindustan Lever Ltd. 2. The respondents manufacture prepared food stuff falling under subheading 2001.10 and 2103.11 of the Central Excise Tariff Act. They were availing Modvat credit. In the Budget of 1991-92, such products were totally exempted from payment of duty under Notification Nos.
19/91 and 27/91, dated 24-7-1991. The jurisdictional Supdt. of Central Excise by a letter dated 5-8-1991 asked the respondents to reverse Modvat credit availed on the inputs used in the manufacture of finished goods which have not been cleared and inputs used in the unfinished goods as well as the stock of inputs lying with them as on 24-7-1991.
Show cause notice was issued to the respondents on 20-1-1992 for reversal of Modvat credit of Rs. 2,80,094/- under Rule 57-I of Central Excise Rules. The respondents in reply, inter alia, referred to the application under Rule 57H for transitional credit facility and pointed out that while considering their application, it has been partly allowed and the remaining part is still pending. Their plea was for adjustment of the amount in the show cause notice against the amounts due to them. The jurisdictional Dy. Commissioner held that the application under Rule 57H was independent of the duty liability of the respondents in terms of Rule 57C of the Central Excise Rules. The Commissioner (Appeals) in the impugned order observed that there is no dispute as to the respondents availing of the credit properly and utilisation thereof in accordance with Rule and when the respondents have acted in accordance with law in availing the credits, the Commissioner (Appeals) found that there is no ground to reverse the Modvat credit thereof. He, therefore, set aside the Dy. Commissioner's order.
3. The ld. D.R. Shri K.L. Ramtake for the appellant Commissioner contended that the credit taken in respect of the inputs lying in stock as well as those in the finished products will have to be reversed when the final product becomes exempted and relied upon the Allahabad High Court judgment in the case of Super Cassettes Industries Ltd. v. U.O.I.-1997 (94) E.L.T. 302 (All).
4. Shri M.H. Patil, the ld. Counsel for the respondents referred to the Tribunal judgment in the case of Delhi Bottling Co. Ltd. v. CCE, New Delhi -1997 (96) E.L.T. 608 (Tribunal) where the Tribunal has followed the Gujarat High Court judgment on Dipak Vegetable Oil Industries v.U.O.I. -1991 (52) E.L.T. 222 (Guj.) to hold contra. In any case, the ld. Counsel submitted that the respondents have no serious objection in the prayer of the Department's appeal that the Dy. Commissioner may be directed to decide the application under Rule 57H submitted by the respondents before enforcing the demand.
5. The rival submissions have been considered carefully. The prayer in the appeal is limited to the following :- "It is prayed that the Order-in-Appeal be set aside and order-in-original bearing No. V.Adj(ch.20) 15-A-105/93, dated 19-1-1994 be confirmed with direction that said demand should be enforced by Divisional Asstt. Collector as per Rules and Regulation after deciding the pending application under Rule 57H of the Central Excise Rules, 1944 of the assessee." 6. Thus, there is an admitted position by the Department that the demand need to be adjusted against the amount of transitional credit as claimed by the respondents in their application under Rule 57H submitted with the jurisdictional Dy. Commissioner of Central Excise.
The ends of justice will be served by acceding to this prayer. The appeal is disposed of accordingly