Fluid Line Vs. Commissioner of Cus. and C. Ex., Pune

Fluid Line vs Commissioner of Cus. and C. Ex., Pune

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Jan 22, 2002

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Citation: sooperkanoon.com/27308
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: J T J.H.
Decided On: Jan 22, 2002
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Fluid Line

Respondent

Commissioner of Cus. and C. Ex., Pune

Legal References

Reported In: (2002)(142)ELT673Tri(Mum.)bai

Excerpt

.....present. on perusal of the appeal memorandum and on hearing the departmental representative the appeal was admitted and was taken up for final disposal.2. the appellant manufactured castings and cleared them on payment of duty. the recipient manufacturer found them as substandard and returned them by discharging the burden of duty as casting under rule 57f(1)(ii). the same goods were latter cleared by the present appellant as scrap on payment of duty as leviable on scrap. differential duty was demanded holding that the goods were leviable to duty at the rate of castings. against the confirmation made by the assistant commissioner and against the imposition of penalty by him the appellant filed an appeal. before the commissioner (appeals) they cited the judgment of the tribunal in the case of collector v. omni forgings gujarat pvt.ltd. - 1995 (78) e.l.t. 282. in that judgment the tribunal had held that in identical circumstances where the goods were used by the appellant for manufacture of their cited final goods the modvat credit was available. the learned commissioner (appeals) observed that the present appellant had not used these goods in the manufacture of further goods and therefore denied the ratio of the cited judgment. on his upholding the lower order the present appeal has been filed.3. the goods initially cleared by the present appellant were returned by the buyers on payment of duty as stipulated under rule 57f(1)(ii) which is attracted where "inputs are returned as such". therefore, until the receipt of the inputs in the factory of the present appellant their character as castings was unchanged. at a latter date however, the castings were cleared as scrap. it is not the case of the revenue that the manufacturer had cleared the castings in the guise of scrap.if they were not defective they would not have been returned by the original buyer. if they were rejects then there would be no option for the manufacturer but to clear them as scrap. where the.....

Full Judgment

1. The appellants are not present. On perusal of the appeal memorandum and on hearing the departmental representative the appeal was admitted and was taken up for final disposal.

2. The appellant manufactured castings and cleared them on payment of duty. The recipient manufacturer found them as substandard and returned them by discharging the burden of duty as casting under Rule 57F(1)(ii). The same goods were latter cleared by the present appellant as scrap on payment of duty as leviable on scrap. Differential duty was demanded holding that the goods were leviable to duty at the rate of castings. Against the confirmation made by the Assistant Commissioner and against the imposition of penalty by him the appellant filed an appeal. Before the Commissioner (Appeals) they cited the judgment of the Tribunal in the case of Collector v. Omni Forgings Gujarat Pvt.

Ltd. - 1995 (78) E.L.T. 282. In that judgment the Tribunal had held that in identical circumstances where the goods were used by the appellant for manufacture of their cited final goods the Modvat credit was available. The learned Commissioner (Appeals) observed that the present appellant had not used these goods in the manufacture of further goods and therefore denied the ratio of the cited judgment. On his upholding the lower order the present appeal has been filed.

3. The goods initially cleared by the present appellant were returned by the buyers on payment of duty as stipulated under Rule 57F(1)(ii) which is attracted where "inputs are returned as such". Therefore, until the receipt of the inputs in the factory of the present appellant their character as castings was unchanged. At a latter date however, the castings were cleared as scrap. It is not the case of the Revenue that the manufacturer had cleared the castings in the guise of scrap.

If they were not defective they would not have been returned by the original buyer. If they were rejects then there would be no option for the manufacturer but to clear them as scrap. Where the scrap is dutiable the burden of duty has to be and has been discharged by the appellant. The application of the cited law is limited inasmuch as it allows Modvat credit to be taken on the goods received back. The further use to which the goods are put does not alter the ratio of the judgment. The taking back of credit is not the point of test but the description of goods as scrap. Since there is nothing to show that the goods were not scrap there was no reason for charging differential duty.

4. The appeal succeeds and is allowed with consequential benefit, if any.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Fluid Line vs Commissioner of Cus. and C. Ex., Pune Same Subject Excise Same Judge J T J.H.