Century Rayon Vs. Commissioner of Central Excise

Century Rayon vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Oct 22, 2003

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Citation: sooperkanoon.com/32764
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: M T K.D.
Decided On: Oct 22, 2003
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Century Rayon

Respondent

Commissioner of Central Excise

Excerpt

.....charged to the appellants. as long as, the duty payment at the suppliers end is not in dispute, the credit cannot be disallowed. also the extent of duty paid by the supplier unit cannot be challenged by the excise authorities at the end of the user factory.4. so far as, the denial of credit in respect of (1) credit taken on commercial invoices (amounting to rs. 1736 (2) invoices not in the name of the appellants (amounting to rs. 2843/-) (3) credit taken twice (rs. 31,0041/-) and (4) the excess credit taken (rs. 1081/-), these have not been pressed during the hearing. hence these are to be rejected as being unsubstantiated and are so rejected.5. so far as, the credit taken on the basis of original invoices is concerned, as referred to in the show cause notice dated 22 september 95, (sic) the objection relates to invoice at sr. nos. 39 and 34 (rs. 1366/- and rs. 3,067/- respectively). the denial of credit is without a speaking order. the rules provide that under certain circumstances, credit can be permitted on the basis of original invoices. there is no findings as to why the credit has not been permitted. therefore, this part of the order is required to be remanded back to the original adjudicating authority and the appellants are required to substantiate their case to claim credit against original invoices. a) the modvat claim to the extent of rs. 73 7576/-, disallowed by the lower authorities on the ground of late declaration or non declaration, is permitted, b) claims in respect of modvat credit taken on commercial invoice (rs. 1736/-) and on the basis of invoices not being in their name (rs. 2,843/-) are rejected, c) the claims for credit taken on original invoices sr. no. 34 and 39 of the show cause notice dated 22 september 95 (rs. 3067/- and rs. 1366/- respectively) are remanded back to the original adjudicating authority for denovo consideration for passing fresh order after following the principles of natural justice, confining only to the said two.....

Full Judgment

2. The appellants appeal is directed against the demand of Rs. 7,98,698/-.

3. The demand arose on account of dispute relating to Modvat credit taken against certain invoices in respect of which the Central Excise Authorities had raised certain objection. In the synopsis provided during the hearing, the learned Counsel informs that, credit for a major amount of Rs. 7,37,576/- has been denied on the ground that, the appellants filed declaration for claiming credit after expiry of 3 months. The learned Counsel pleads that the credit is permissible in terms of the larger bench decision of the CEGAT in the case of Kamakhya Steels (P) Ltd. v. Commissioner of Central Excise, Meerut reported in 2000 (121) ELT 247 (Tribunal-LB) In the said judgment, it has been held that, the permissibility of credit without filling declaration or against deficient declaration/Documents has been allowed under Sub Rule (11) of Rule 57G which was introduced vide notification No. 7/99-CE (NT) dated 9.2.99 and the benefit thereunder is available even for cases pending in appeal. Therefore, the credit denial on account of delayed filing of the declaration is not justified in terms of larger bench judgment of the Tribunal in the case of Kamakhya Steels (Supra).

So far as the disallowance of claim for credit of Rs. 20,200/- on Spinnerette is concerned, it is stated in the show cause notices that, the payment is in respect of labour charge for procuring said Spinnerettes. The appellants deny this allegation. The appellants sent old and worn out spinnerettes to a job worker and in exchange of the old spinnerettes the job worker supplies a fully functional spinnerettes to the appellants, after charging only the labour cost involved in converting the worn out part into a new one by keeping in mind the material cost of the old and worn out spinnerettes received from the appellants free of cost. Therefore, the duty paid on this spinnerettes cannot be treated as labour cost. It is definitely a duty paid on the capital goods, may be on the basis of a special price charged to the appellants. As long as, the duty payment at the suppliers end is not in dispute, the credit cannot be disallowed. Also the extent of duty paid by the supplier unit cannot be challenged by the Excise Authorities at the end of the user factory.

4. So far as, the denial of credit in respect of (1) credit taken on commercial invoices (Amounting to Rs. 1736 (2) invoices not in the name of the appellants (amounting to Rs. 2843/-) (3) credit taken twice (Rs. 31,0041/-) and (4) the excess credit taken (Rs. 1081/-), these have not been pressed during the hearing. Hence these are to be rejected as being unsubstantiated and are so rejected.

5. So far as, the credit taken on the basis of original invoices is concerned, as referred to in the show cause notice dated 22 September 95, (SIC) the objection relates to invoice at Sr. Nos. 39 and 34 (Rs. 1366/- and Rs. 3,067/- respectively). The denial of credit is without a speaking order. The Rules provide that under certain circumstances, credit can be permitted on the basis of original invoices. There is no findings as to why the credit has not been permitted. Therefore, this part of the order is required to be remanded back to the original adjudicating authority and the appellants are required to substantiate their case to claim credit against original invoices.

a) The Modvat claim to the extent of Rs. 73 7576/-, disallowed by the lower authorities on the ground of late declaration or non declaration, is permitted, b) Claims in respect of Modvat credit taken on commercial invoice (Rs. 1736/-) and on the basis of invoices not being in their name (Rs. 2,843/-) are rejected, c) The claims for credit taken on original invoices Sr. No. 34 and 39 of the show cause notice dated 22 September 95 (Rs. 3067/- and Rs. 1366/- respectively) are remanded back to the original adjudicating authority for denovo consideration for passing fresh order after following the principles of natural justice, confining only to the said two invoices.

7. Appeal is allowed partly in the above terms, and consequentially orders of the lower authorities stand modified, as above.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Century Rayon vs Commissioner of Central Excise Same Subject Excise Same Judge M T K.D.