Rado Tyres Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....- 2002 (147) e.l.t. 290 (t) wherein it was held that in view of the definition of sale in section 2(h), modvat credit was available to a manufacturer in respect of inputs supplied free to a job worker under an invoice not involving sale or stock transfer.bpl ltd. v. cce -1997 (73) ecr 829 (t) wherein it was held that the term "sale" as defined in the aforesaid section also included book adjustments made in case of stock transfers. it was specifically held that stock transfer invoices on which modvat credit had been disallowed would fall within the ambit of "sale" as stated in notification no. 14/95 and were therefore eligible to modvat credit.pratap steel rolling mills pvt. ltd. v. cce - 2001 (137) e.l.t. 741 (t) wherein it was held that the sale of goods is not the determinative factor for availing modvat credit in the type of transactions under consideration, as clarified in the board's instructions dated 9-9-1997. (v) cce v. modern food industries (india) ltd. - 1988 (37) e.l.t. 294 (t) = 1988 (18) ecr 541 (t) wherein it was held that transfer of goods by book adjustments from one unit to another of a multi-unit organization was adequate for the purposes of the.....

Judgment:

1. The appellants are job workers manufacturing tyres on a job work basis for CEAT Ltd. and Apollo Tyres Ltd. M/s. CEAT Ltd. and Apollo Tyres Ltd. purchase the raw materials and supplied the same to the appellants. They are registered as dealers and they issue invoices to the appellants under Rule 57GG of the Central Excise Rules, 1944. The appellants took Modvat credit on the basis of these invoices.

2. Shri D.B. Shroff, learned Advocate appearing for the appellants pleaded that the department's contention is that such invoices are stock transfer invoices and it does not amount to sale as defined under Section 2(h) of the said Act. He pleaded that this issue in the present appeal is no longer res integra in view of the following decisions -CCE, Hyderabad v. A.P.S.E.B. - 2002 (147) E.L.T. 290 (T) wherein it was held that in view of the definition of sale in Section 2(h), Modvat credit was available to a manufacturer in respect of inputs supplied free to a job worker under an invoice not involving sale or stock transfer.BPL Ltd. v. CCE -1997 (73) ECR 829 (T) wherein it was held that the term "sale" as defined in the aforesaid section also included book adjustments made in case of stock transfers. It was specifically held that stock transfer invoices on which Modvat credit had been disallowed would fall within the ambit of "sale" as stated in Notification No. 14/95 and were therefore eligible to Modvat credit.Pratap Steel Rolling Mills Pvt. Ltd. v. CCE - 2001 (137) E.L.T. 741 (T) wherein it was held that the sale of goods is not the determinative factor for availing Modvat credit in the type of transactions under consideration, as clarified in the Board's instructions dated 9-9-1997.

(v) CCE v. Modern Food Industries (India) Ltd. - 1988 (37) E.L.T. 294 (T) = 1988 (18) ECR 541 (T) wherein it Was held that transfer of goods by book adjustments from one unit to another of a multi-unit organization was adequate for the purposes of the definition of "sale" as defined in Section 2(h) of the said Act and that Modvat credit would be permissible.CCE v. Achuta Vulcanising Cement Pvt. Ltd. - 2001 (132) E.L.T. 509 (T-Chennai) wherein it was held that the prescribed document under the Notification was an invoice and that there was no reference to any sale document and that this point had been clarified by the Board in their Circular Number 267/603/97-CX., dated 9-9-1997, which had been issued in light of the order passed by the Jammu and Kashmir High Court in case of R.B. Jodha Mat Industries dated 29-5-1997 in Civil Writ Petition No. 866/96.

(vii) CCE, Trichy v. Henkel Spic (I) Ltd - 2003 (159) E.L.T. 571 (T-Chennai) He, therefore, pleaded that the appeal may be allowed.

3. Shri L. Narasimha Murthy, learned SDR appearing for the Revenue re-iterated the reasons given by the Commissioner (Appeals) in his order. However, he agreed that the issue is no longer res integra and in view of various decisions relied upon by the appellants, the Revenue has no case.

4. We have carefully considered the submissions made by both the sides.

We find that the matter was earlier remanded back by the CEGAT as per Final Order Nos. 1517 to 1524/2001, dated 21-9-2001 [2001 (138) E.L.T.1121 (T)] to examine the issue whether the term 'sale/transfer of possession of goods' is in conformity with the Section 2(h) of the Act and whether transfer of possession of goods is supported by valuable consideration. The Commissioner (Appeals) in the impugned order came to the conclusion that the transfer of possession cannot be considered as sale as defined under Section 2(h) of the Central Excise Act, 1944, in the absence of any payment or valuable consideration and accordingly rejected the appeal. We find that the issue has already been decided by the Tribunal in case of Commissioner of Central Excise v. Modern Food Industries (India) Ltd. - 1988 (37) E.L.T. 294 (T) and subsequently it has been followed in the various decisions relied upon by the appellants. We find that in case of Pratap Steel Rolling Mills Pvt.

Ltd, v. CCE - 2001 (137) E.L.T. 741 (T) and CCE, Hyderabad v. APSEB, 2002 (147) E.L.T. 290 (T) in an identical situation, the credit was allowed to the job worker. Therefore we are of the view that the goods transferred to the job worker on proper documents, each invoice showing the particular payment of duty and other details cannot be denied to the appellants. Accordingly we consider such transfer by book adjustments from the Companies to the job workers as sale within the meaning of Section 2(h) and allow the appeal with consequential relief, if any.