Wipro Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. the issue in all these appeals is common and therefore, they are being disposed of by this common order.2. the appellants are admittedly manufacturers of soap having facility to process hydrogenation or hydrolysis, within the factory of production and were obtaining money credit under the rules of chapter v.aaa of the central excise rules, 1944 on minor oils received as raw material in the factory. they were also availing money credit on rice bran oil (hereinafter referred to as rbo). rbo received from hindustan lever limited (hereinafter referred to as hll) and as per contract, they were to return 80% of the inputs so received to hll, after hydrogenation/hydrolysis of the rbo. they were reversing proportionate money credit on the quantities so returned to hll. the remaining quantity of the rbo as received from hll, after hydrolysis, was taken up and used in the manufacture of soap. the money credit in their books of accounts were utilised as prescribed under the rules on clearance of such soap manufactured by them. they were issued show cause notice proposing to deny them the money credit availed, on the rbo, received for such processing from hll. it also proposed to deny the amounts adjusted towards clearance of toilet soaps made by them and also proposed penalties. the jurisdictional officers confirmed the proposals as made in the show cause notice and imposed penalties.3. the commissioner (appeals) came to a finding that: "in the present case it was clear from the admitted fact on record that the input received were not for the purpose of use in the manufacture of soap but for manufacture of fatty acids and returning the same to m/s. hll.therefore, as a matter of fact they are not eligible for money credit at all for such oil received for the purpose of such conversion and return as per the provisions of rule 57k and the notification issued thereunder. therefore, availment of money credit for the inputs received for processing and return is not correct, legal or proper and thereafter held that such money credit availed had to be disallowed under rule 57(p) and the demand was not barred beyond 5 years as pleaded before him. since the assessments were provisional and provisions of rule 57-1 or under 11a would be applicable and under rule 57(p) no time limit had been prescribed and the orders of the assistant commissioners were to be held proper and penalties as determined under rule 173q were upheld......" 4. we have heard both sides and have considered the submissions made and perused the records and we find : (a) the contention of the learned sdr that the money credit rules and the chapter has been inserted without any saving clause and that section 38a of the central excisc act, 1944 read with section 132 of the finance act, 2001 (14/2001) will not entitle the present appeals to be proceeded any further. we find that the provisions of section 38a of the central excise act, 1944 are very clear and explicit and therefore when read with section 1,12 of the finance act, 2001, these proceedings cannot be stopped, as a being urged by the sdr. (b) considerding the issue on merits, the learned advocate had sub-mitted that the issue has been settled in their own case vide orders nos. ci-77 and 78/98/wzb, dated 12-1-99 [1999 (111) e.l.t. 357 (t)], c-i 3666/wzb/2000, dated 12-10-2000 [2001 (127) e.l.t. 137 (t)] and c-ii/3083-87/wzb/2001, dated 27-11-2001 of the wrb cegat. he also mentioned that the order of the commissioner, aurangabad also on the same line granting the benefit of money credit scheme in their own case has attained finality as no appeals in that case was made. these appeals should be allowed with consequential benefit. the learned dr fairly conceded, that on merits the matter is fully covered by the tribunal decisions and there was no submission to be made on the issue of interpretation of notification 46/89 cent, dated 11-10-89. there is no allegation also that the provisions of the trade notice issued were not duly complied with. we have perused these orders of the western regional bench of cegat. we find no reason to deny the benefit of the money credit scheme as availed by the appellants on the ground as proposed by the revenue and arrived at by the lower authorities. (c) when we find that there is no case or cause to deny the benefit of money credit scheme, we find no reason to invoke the penalty clause as arrived at by the lower authorities.5. in view of our findings, the orders of the lower authorities are set aside and the appeals allowed with consequential benefits as per law.

Judgment:
1. The issue in all these appeals is common and therefore, they are being disposed of by this common order.

2. The appellants are admittedly manufacturers of Soap having facility to process hydrogenation or hydrolysis, within the factory of production and were obtaining Money Credit under the rules of Chapter V.AAA of the Central Excise Rules, 1944 on Minor Oils received as Raw Material in the factory. They were also availing Money Credit on Rice Bran Oil (hereinafter referred to as RBO). RBO received from Hindustan Lever Limited (hereinafter referred to as HLL) and as per contract, they were to return 80% of the inputs so received to HLL, after hydrogenation/hydrolysis of the RBO. They were reversing proportionate money credit on the quantities so returned to HLL. The remaining quantity of the RBO as received from HLL, after hydrolysis, was taken up and used in the manufacture of Soap. The money credit in their books of accounts were utilised as prescribed under the rules on clearance of such Soap manufactured by them. They were issued show cause notice proposing to deny them the money credit availed, on the RBO, received for such processing from HLL. It also proposed to deny the amounts adjusted towards clearance of Toilet Soaps made by them and also proposed penalties. The jurisdictional officers confirmed the proposals as made in the show cause notice and imposed penalties.

3. The Commissioner (Appeals) came to a finding that: "In the present case it was clear from the admitted fact on record that the input received were not for the purpose of use in the manufacture of Soap but for manufacture of fatty acids and returning the same to M/s. HLL.

Therefore, as a matter of fact they are not eligible for money credit at all for such oil received for the purpose of such conversion and return as per the provisions of Rule 57K and the notification issued thereunder. Therefore, availment of money credit for the inputs received for processing and return is not correct, legal or proper and thereafter held that such money credit availed had to be disallowed under Rule 57(P) and the demand was not barred beyond 5 years as pleaded before him. Since the assessments were provisional and provisions of Rule 57-1 or under 11A would be applicable and under Rule 57(P) no time limit had been prescribed and the orders of the Assistant Commissioners were to be held proper and penalties as determined under Rule 173Q were upheld......" 4. We have heard both sides and have considered the submissions made and perused the records and we find : (a) The contention of the learned SDR that the money credit rules and the chapter has been inserted without any saving clause and that Section 38A of the Central Excisc Act, 1944 read with Section 132 of the Finance Act, 2001 (14/2001) will not entitle the present appeals to be proceeded any further. We find that the provisions of Section 38A of the Central Excise Act, 1944 are very clear and explicit and therefore when read with Section 1,12 of the Finance Act, 2001, these proceedings cannot be stopped, as a being urged by the SDR. (b) considerding the issue on merits, the learned Advocate had sub-mitted that the issue has been settled in their own case vide Orders Nos. CI-77 and 78/98/WZB, dated 12-1-99 [1999 (111) E.L.T. 357 (T)], C-I 3666/WZB/2000, dated 12-10-2000 [2001 (127) E.L.T. 137 (T)] and C-II/3083-87/WZB/2001, dated 27-11-2001 of the WRB CEGAT. He also mentioned that the Order of the Commissioner, Aurangabad also on the same line granting the benefit of money credit scheme in their own case has attained finality as no appeals in that case was made. These appeals should be allowed with consequential benefit.

The learned DR fairly conceded, that on merits the matter is fully covered by the Tribunal decisions and there was no submission to be made on the issue of interpretation of Notification 46/89 CENT, dated 11-10-89. There is no allegation also that the provisions of the Trade Notice issued were not duly complied with. We have perused these orders of the Western Regional Bench of CEGAT. We find no reason to deny the benefit of the Money Credit Scheme as availed by the appellants on the ground as proposed by the Revenue and arrived at by the lower authorities.

(c) When we find that there is no case or cause to deny the benefit of money credit scheme, we find no reason to invoke the penalty clause as arrived at by the lower authorities.

5. In view of our findings, the orders of the lower authorities are set aside and the appeals allowed with consequential benefits as per law.