Cce Vs. Packsale Industries

Cce vs Packsale Industries

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided May 20, 1999

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Citation: sooperkanoon.com/15895
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S Kang, a T V.K.
Decided On: May 20, 1999
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Cce

Respondent

Packsale Industries

Legal References

Reported In: (2000)(88)LC155Tri(Mum.)bai

Excerpt

.....by the revenue that the respondents were eligible for the benefit of notification no. 175/86 being a s.s.i, unit. if they were not eligible to avail the benefit of clause 1(a)(i) of notification 175/86 as they had not opted for the modvat scheme as provided under rule 57a, they were eligible to make the clearance of the excisable goods without payment of duty upto the prescribed limit under para 1(a)(ii) of the notification, they cannot be asked to pay the duty at the tariff rates as has been rightly decided by the collector (appeals) in the impugned order. similar views were held by the appellate tribunal in the case of jai industries, referred to above, wherein it was held that nowhere in the notification it is provided that if the manufacturer paid the excess duty, the benefit of the notification would be denied. the nature of the notification is such that it is the option of the assessee either to avail of the benefit of modvat facility or not and the mere fact that they filed the declaration to avail modvat facility while they actually did not avail it, cannot stand in the way of extension of the benefit of notification to them. we also find that the provisions in rule 57e exist in the central excise rules which empowers the department to vary the modvat credit availed of by the manufacturer. in the light of these facts and circumstances, we do not find any reason to interfere with the impugned order and as such all the appeals filed by the revenue are rejected.

Full Judgment

1. The issue involved in all these cases is whether the duty of Central Excise can be demanded at the tariff rate from an unit Registered as S.S.I, when they cleared the goods on payment of duty at the concessional rate without availing the benefit of Modvat credit under Rule 57A of the Central Excise Rules.

2. Shri K. Srivastava, Ld. S.D.R., at the outset, mentioned that they have filed five supplementary appeals along with the application for condonation of delay. The delay in filing the supplementary appeals is condoned.

3. When the matter was called no one was present on behalf of the Respondents M/s. Packsale Industries in spite of the notice. We, therefore, heard the Ld. D.R. and the submissions submitted by the Respondents under their letter dt. 26.4.1999.

4. Ld. D.R. submitted that the Respondents paid concessional rate of duty while clearing their goods falling under Heading 48.19 of the schedule to the Central Excise Tariff Act while remaining out of Modvat Credit scheme. As a result of this, payment of duty at the concessional rate under Notification 175/86, the customers of the Respondents availed higher notional credit under Rule 57B of the Central Excise Rules, as it stood at the relevant time. Therefore demands were issued to the Respondents for payment of duty at full rate. The Assistant Collector confirmed duty demand issued under five show cause notices and imposed penalty of Rs. 5,000/- holding that as the Respondents were not availing of Modvat Credit facility they were not eligible to make the payment of duty at 5% concessional rate under the Notification; and that they should have cleared the goods without payment of duty and by this method they extended the benefit of higher notional credit to their customers. Ld. D.R. further submitted that as the Respondents by this method caused a loss of revenue to the Government by making their customers availing of higher notional credit, the demand of Central Excise duty confirmed against them by the Assistant Collector was justified.

5. We have considered the submissions of the ld. D.R. and perused the records. The Respondents, in their written submission, have submitted that they are not debarred from availing the benefit under Notification 175/86 and they were eligible for clearance of the goods without payment of duty. They have relied upon the following decisions:Jai Industries v. CCE It has not been disputed by the Revenue that the Respondents were eligible for the benefit of Notification No. 175/86 being a S.S.I, unit. If they were not eligible to avail the benefit of Clause 1(a)(i) of Notification 175/86 as they had not opted for the Modvat scheme as provided under Rule 57A, they were eligible to make the clearance of the excisable goods without payment of duty upto the prescribed limit under para 1(a)(ii) of the Notification, They cannot be asked to pay the duty at the tariff rates as has been rightly decided by the Collector (Appeals) in the impugned order. Similar views were held by the Appellate Tribunal in the case of Jai Industries, referred to above, wherein it was held that nowhere in the Notification it is provided that if the manufacturer paid the excess duty, the benefit of the Notification would be denied. The nature of the Notification is such that it is the option of the assessee either to avail of the benefit of Modvat facility or not and the mere fact that they filed the declaration to avail Modvat facility while they actually did not avail it, cannot stand in the way of extension of the benefit of Notification to them. We also find that the provisions in Rule 57E exist in the Central Excise Rules which empowers the department to vary the Modvat credit availed of by the manufacturer. In the light of these facts and circumstances, we do not find any reason to interfere with the impugned order and as such all the appeals filed by the Revenue are rejected.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Cce vs Packsale Industries Same Subject Excise Same Judge S Kang, a T V.K.