Commissioner of Central Excise Vs. K.S.H. International Ltd.

Commissioner of Central Excise vs K.S.H. International Ltd.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Jan 16, 2004

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Citation: sooperkanoon.com/33836
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: M T K.D.
Decided On: Jan 16, 2004
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

K.S.H. International Ltd.

Excerpt

1. the instant appeal is filed by the revenue against the impugned order-in-appeal passed by the learned commissioner (appeals).2. the respondents are the manufacturers of paper insulated copper/aluminium strips falling under heading no. 85.44 of the central excise tariff act, 1985. copper bars/rods, aluminium bars/rods and insulating craft paper are the inputs. the respondents undertake partial production on job work basis on behalf of their principal manufacturers. while the principal manufacturers send their main material namely copper/aluminium to the respondents for job work, the craft paper used by the respondents for such manufacture is out of their own stock, on which modvat credit has been taken. the despatch of finished goods to the principal manufacturer being under job work, in terms of notification no. 214/86-ce dated 25.3.1986, no duty is being paid by the respondents on such clearance of finished goods. the credit of duty paid was taken on inputs (craft paper) used in the finished goods, which are exempted from payment of duty. taking such credit is not permitted in terms of the provisions contained in rule 57c of the central excise rules 1944. therefore, the respondents were asked to reverse the said credit. the demand of rs. 9,02,455/- was dropped by the adjudicating authority on the ground of limitation. the commissioner (appeals) rejected the revenue's appeal challenging the said order-in-original. hence the instant appeal from the revenue.4. in this connection, i note that, the revenue's main ground in appeal is that, the demand is maintainable for the reason that longer period of limitation is applicable in this case. on merit, the original authority has already held that the demand is sustainable.5. the respondents however have contested that the issue on merit is squarely covered against the revenue. they cited the judgment of cegat in the case of shakti insulated wires ltd. v. cce, mumbai-iv reported in 2002 (51) rlt 115 (cegat-mum), in.....

Full Judgment

1. The instant appeal is filed by the revenue against the impugned order-in-appeal passed by the learned Commissioner (Appeals).

2. The respondents are the manufacturers of paper insulated copper/aluminium strips falling under heading No. 85.44 of the Central Excise Tariff Act, 1985. Copper bars/rods, aluminium bars/rods and insulating craft paper are the inputs. The respondents undertake partial production on job work basis on behalf of their principal manufacturers. While the principal manufacturers send their main material namely copper/aluminium to the respondents for job work, the craft paper used by the respondents for such manufacture is out of their own stock, on which modvat credit has been taken. The despatch of finished goods to the principal manufacturer being under job work, in terms of notification No. 214/86-CE dated 25.3.1986, no duty is being paid by the respondents on such clearance of finished goods. The credit of duty paid was taken on inputs (craft paper) used in the finished goods, which are exempted from payment of duty. Taking such credit is not permitted in terms of the provisions contained in Rule 57C of the Central Excise Rules 1944. Therefore, the respondents were asked to reverse the said credit. The demand of Rs. 9,02,455/- was dropped by the adjudicating authority on the ground of limitation. The Commissioner (Appeals) rejected the revenue's appeal challenging the said order-in-original. Hence the instant appeal from the revenue.

4. In this connection, I note that, the revenue's main ground in appeal is that, the demand is maintainable for the reason that longer period of limitation is applicable in this case. On merit, the original authority has already held that the demand is sustainable.

5. The respondents however have contested that the issue on merit is squarely covered against the revenue. They cited the judgment of CEGAT in the case of Shakti Insulated Wires Ltd. v. CCE, Mumbai-IV reported in 2002 (51) RLT 115 (CEGAT-Mum), in which relying on the judgment of CEGAT in the case of Jindal Polymers v. CCE 2001 (43) RLT 680, it was held that clearances of finished goods on a job work basis, without payment of duty, does not tentamount to clearance of finished goods under full exemption or at nil rate of duty because, the said finished goods are subsequently cleared from the premises of the principal manufacturer on payment of duty.

6. Respectfully following the ratio of the law laid down in the said judgment, I find that the revenue appeal deserves to be rejected.

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