Arvind Mills Ltd. Vs. Commissioner of Central Excise

Arvind Mills Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Aug 18, 2003

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Citation: sooperkanoon.com/31886
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T Gowri, K Kumar
Decided On: Aug 18, 2003
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Arvind Mills Ltd.

Respondent

Commissioner of Central Excise

Excerpt

.....dismissing the appeal before him for failure to deposit about half the duty demanded.3. the notice issued to the appellant demanded duty on two counts. the first related to modvat credit taken as duty paid on inputs that the appellant used in manufacturing processed fabrics, which were destroyed in a fire that broke out in the appellant's factory. this accounts for rs 40.88 lakhs out of the total duty of rs 42.87 lakhs. the deputy commissioner, whose order was in appeal before the commissioner (appeals) is somewhat confused. he says that the decision of the tribunal in inalsa ltd v. cce 1997 (90) elt 417 and other decisions of the tribunal following it, holding that the provisions of rule 57c will not apply in a case where the remission of duty has been granted on finished products manufactured out of these inputs, because the remission is not equivalent to exemption from duty will not apply because no remission has been granted. if that is the case, it should logically follow that there is no basis for asking for reversal of credit. the commissioner (appeals)' stay order is silent as to the applicability of the ratio of the decision which was raised before him.we are therefore of the view that this amount of duty should have been waived since there were three decisions of the tribunal in the assessee's favour.4. the remaining amount of rs 1.98 lakhs represents duty payable on the yarn that the applicant utilised in the manufacture of grey fabrics which was burnt in fire. the assessee was manufacturing cotton yarn on which duty is payable and utilising it captively in the manufacture of fabrics. he assessee was availing the provisions of rule 49 (a) which permits the deferment of duty payable on yarn to the point of clearance of the fabrics in the manufacture of which it is utilised. the counsel for the appellant states that the application made by the appellant for remission of duty is still pending action before the commissioner and therefore the adjudication.....

Full Judgment

2. The appeal is against the order of the Commissioner (Appeals) dismissing the appeal before him for failure to deposit about half the duty demanded.

3. The notice issued to the appellant demanded duty on two counts. The first related to modvat credit taken as duty paid on inputs that the appellant used in manufacturing processed fabrics, which were destroyed in a fire that broke out in the appellant's factory. This accounts for Rs 40.88 lakhs out of the total duty of Rs 42.87 lakhs. The Deputy Commissioner, whose order was in appeal before the Commissioner (Appeals) is somewhat confused. He says that the decision of the Tribunal in Inalsa Ltd v. CCE 1997 (90) ELT 417 and other decisions of the Tribunal following it, holding that the provisions of Rule 57C will not apply in a case where the remission of duty has been granted on finished products manufactured out of these inputs, because the remission is not equivalent to exemption from duty will not apply because no remission has been granted. If that is the case, it should logically follow that there is no basis for asking for reversal of credit. The Commissioner (Appeals)' stay order is silent as to the applicability of the ratio of the decision which was raised before him.

We are therefore of the view that this amount of duty should have been waived since there were three decisions of the Tribunal in the assessee's favour.

4. The remaining amount of Rs 1.98 lakhs represents duty payable on the yarn that the applicant utilised in the manufacture of grey fabrics which was burnt in fire. The assessee was manufacturing cotton yarn on which duty is payable and utilising it captively in the manufacture of fabrics. He assessee was availing the provisions of Rule 49 (A) which permits the deferment of duty payable on yarn to the point of clearance of the fabrics in the manufacture of which it is utilised. The counsel for the appellant states that the application made by the appellant for remission of duty is still pending action before the Commissioner and therefore the adjudication orders and the appellate orders are premature. Prima facie he seems to be correct. If the application for remission of duty is still pending, it would be inappropriate to decide the appeal of the assessee demanding duty.

5. In these circumstances, we allow the appeal, set aside the impugned order and remand the matter to the Commissioner (Appeals) who shall dispose of the appeal without insisting on any deposit.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Arvind Mills Ltd. vs Commissioner of Central Excise Same Subject Excise Same Judge S T Gowri, K Kumar