A.D. Engineers Vs. Collector of Central Excise

A.D. Engineers vs Collector of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 06, 1998

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Citation: sooperkanoon.com/14614
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On: Nov 06, 1998
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

A.D. Engineers

Respondent

Collector of Central Excise

Legal References

Reported In: (1999)(105)ELT665TriDel

Excerpt

.....inputs in terms of para a(i) of the said notification.however, they had not taken credit of duty paid on inputs and, thus, had not availed themselves of modvat benefit. the adjudicating proceedings held that the appellant was liable to pay duty at tariff rate as they had not availed of modvat benefit, even though they had filed a declaration under rule 57g for the purpose of modvat credit.the impugned order upholds the said adjudication order.2. arguing the appeal, shri hashmat nabi, learned counsel submits that the appellant could not be treated as a modvat unit as they had not availed of modvat credit at all on inputs. they had only filed a modvat declaration. therefore, they were entitled to duty free clearance of goods under the provisions of paragraph a(ii). in any event, there is no justification for payment of duty at tariff rate. he refers us to the decision of the cegat in jai industries v. c.c.e., 1993 (68) e.l.t.475, wherein the tribunal held that the filing of modvat declaration did not amount to availing of modvat credit and that an assessee does not become ineligible for exemption under para a(ii) of notification no. 175/86 on account of filing a modvat declaration. shri hashmat nabi, submits that the decisions of the cegat clearly covers this case and appeal is required to be allowed.4. we have perused the records of the case and have considered the rival submissions. we find that in the instant case, appellant had not taken credit of duty paid on the inputs. therefore, this case is not covered as a modvat unit by para a(i) of notification. they were eligible for the exemption as provided in para a(ii) of notification no. 175/86 and demand of duty at tariff rate was not justified. the appeal is accordingly allowed with consequential relief to the appellant and the impugned order is set aside.

Full Judgment

1. The appellant is a Small Scale Unit enjoying the benefit of Notification No. 175/86. They cleared the goods manufactured by them on payment of duty @ 10% ad valorem as applicable to units availing of Modvat credit on inputs in terms of para a(i) of the said Notification.

However, they had not taken credit of duty paid on inputs and, thus, had not availed themselves of Modvat benefit. The adjudicating proceedings held that the appellant was liable to pay duty at Tariff rate as they had not availed of Modvat benefit, even though they had filed a declaration under Rule 57G for the purpose of Modvat credit.

The impugned order upholds the said adjudication order.

2. Arguing the appeal, Shri Hashmat Nabi, learned Counsel submits that the appellant could not be treated as a Modvat unit as they had not availed of Modvat credit at all on inputs. They had only filed a Modvat declaration. Therefore, they were entitled to duty free clearance of goods under the provisions of paragraph a(ii). In any event, there is no justification for payment of duty at Tariff rate. He refers us to the decision of the CEGAT in Jai Industries v. C.C.E., 1993 (68) E.L.T.475, wherein the Tribunal held that the filing of Modvat declaration did not amount to availing of Modvat credit and that an assessee does not become ineligible for exemption under para a(ii) of Notification No. 175/86 on account of filing a Modvat declaration. Shri Hashmat Nabi, submits that the decisions of the CEGAT clearly covers this case and appeal is required to be allowed.

4. We have perused the records of the case and have considered the rival submissions. We find that in the instant case, appellant had not taken credit of duty paid on the inputs. Therefore, this case is not covered as a Modvat unit by para a(i) of Notification. They were eligible for the exemption as provided in para a(ii) of Notification No. 175/86 and demand of duty at Tariff rate was not justified. The appeal is accordingly allowed with consequential relief to the appellant and the impugned order is set aside.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties A.D. Engineers vs Collector of Central Excise Same Subject Excise