M/S. the Supreme Industries Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. the applicants make plastic crates for carriage of bottles. certain moulds had been imported by them where credit of the cvd was taken under rule 57q on 6.10.95 and on 10.1.96. the crates so manufactured were cleared on nil rate in terms of a notification. rule 57r of the central excise rules 1944 does not permit credit to be taken where the capital goods are used exclusively for production of goods eligible for clearance without payment of duty. during october 1995 to january 1996 all crates so cleared were at nil rate of duty. therefore the show cause notice was issued seeking reversal of the credit taken. the commissioner confirmed the reversal of rs. 1413487.30. the assessees filed an appeal and this application for waiver of predeposit thereof.2. shri mh patil submits that the same moulds apart from producing crates also produced scrap which were final products cleared on payment of duty and therefore the capital goods could not be called as used 'exclusively for manufacture of the goods, cleared without payment of duty. we find merit in this claim. we however feel that this issue should be settled early. granting the prayer for waiver and stay, we direct that this case be posted for our of turn hearing in june 2001.issue notice.

Judgment:
1. The applicants make Plastic Crates for carriage of bottles. Certain moulds had been imported by them where credit of the CVD was taken under Rule 57Q on 6.10.95 and on 10.1.96. The crates so manufactured were cleared on Nil rate in terms of a notification. Rule 57R of the Central Excise Rules 1944 does not permit credit to be taken where the capital goods are used exclusively for production of goods eligible for clearance without payment of duty. During October 1995 to January 1996 all crates so cleared were at nil rate of duty. Therefore the show cause notice was issued seeking reversal of the credit taken. The Commissioner confirmed the reversal of Rs. 1413487.30. The assessees filed an appeal and this application for waiver of predeposit thereof.

2. Shri MH Patil submits that the same moulds apart from producing crates also produced scrap which were final products cleared on payment of duty and therefore the capital goods could not be called as used 'exclusively for manufacture of the goods, cleared without payment of duty. We find merit in this claim. We however feel that this issue should be settled early. Granting the prayer for waiver and stay, we direct that this case be posted for our of turn hearing in June 2001.

Issue Notice.