Full Judgment
2. Heard both the sides. Learned Counsel for the appellants submitted that the Tribunal had vacated a similar demand for the subsequent period in their own case as per Final Order No. A/810/97-NB(SM), dated 7-10-1997 in Appeal No. E/2331/94-NB. He also relied on the CBEC's Circular No. 441/7/99-CE., dated 23-2-1999 as also on the Tribunal's Larger Bench decision in Kamakhya Steels (P) Ltd. v. CCE - 2000 (121) E.L.T. 247 (T-LB) = 2000 (40) R.L.T. 575. The DR reiterated the view taken in the impugned order.
3. After careful examination of the matter, we are of the view that the order passed by the learned Single Member of the Tribunal in the present appellants' own case for the subsequent period should be followed in this case inasmuch as the facts are similar. Just as in the instant case, M/s. Polar Industries Ltd. had, in the case considered by the Tribunal in Appeal No. E/2331/94-NB, paid duty on stampings and laminations which they had manufactured out of bought out inputs and cleared to job workers under Rule 57F(2) challans and gate passes for the purpose of manufacture of die cast rotor (intermediate product) and they had taken Modvat credit of the said duty upon return of the intermediate product under the challans and gate passes. The Modvat declaration (under Rule 57G) contained requisite particulars of the inputs and final product as also of despatch of stampings and laminations under Rule 57F(2) to job workers for the manufacture of the intermediate product. The Rule 57F(2) challans under which materials moved to job workers' premises and the gate passes under which duty was paid on the goods contained cross-references. There was no dispute of any of these facts noted in the order of adjudication in that case.
After noting all these facts, the Tribunal, in Final Order dated 7-10-1997, held that, although it was open to the party to have cleared the stampings and laminations without payment of duty, under Rule 57F(2), to the job workers, they were entitled to take Modvat credit of the duty they actually paid on the said inputs and to utilise the same for payment of duty on their final products.
In the instant case also, while following the procedure under Rule 57F(2) read with Rule 57J, the appellants happened to pay duty on the stampings and laminations cleared to job workers for manufacture of die cast rotor. It was credit of that duty which they availed on receipt of the intermediate product in their factory from the job workers. The lower authorities erred in denying this benefit to the party, who had produced the relevant gate passes (which were valid documents for availment of Modvat credit) to establish the duty-paid nature of the inputs viz. laminations and stampings. Rule 57J, read with the notification issued thereunder, entitled the party to take Modvat credit of the duty paid on such inputs used in the manufacture of intermediate product and utilise the same for payment of duty on final product. Significantly, in the orders passed by the authorities below, there is no rebuttal of this plea of the party, nor is there any finding that, for availing the credit, the party did not satisfy the substantive conditions under Rule 57A, viz. to establish the duty-paid nature of the inputs and to have utilised the goods in the manufacture of final products.
4. Following, with approval, the order of the learned Single Member of the Tribunal, cited by the Counsel, we hold that the appellants are entitled to avail the Modvat credit in question. However, we have not found the Board's circular or the decision in Kamakhya Steels (supra) to be applicable to the facts of this case.
5. In the result, the impugned order is set aside and the appeal is allowed.