Orissa Industries Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
2. we find that the appellants have filed a miscellaneous application for rectification of the stay order dated 22.5.06. the learned advocate fairly states that he appeared in that case at the time of hearing of the stay petition, but did not plead the ground of limitation while seeking waiver of the predeposit. the appellants have stated in the miscellaneous application for rectification of mistake that possibly the facts in their case which were put up before the bench had got mixed up with the facts of another case taken up for hearing on the same day. we find that the bench which heard the stay petition had allowed full waiver of deposit on the ground of limitation which was not actually pleaded by the appellants. however, since the appeal itself has been listed today and we have proceeding to hear and decide the appeal on merits, the miscellaneous application filed is of no consequence and we dismiss the same.3. shri kartik kurmy, learned advocate appearing for the appellants states that the appellants imported the impugned refractory bricks which were defective and damaged, filed necessary declaration in respect of the same and took credit of the additional duty of customs.he, further, states that the duty paying documents were defaced by the jurisdictional officers and after these bricks were put through a process of manufacture, the final products were cleared on payment of appropriate duty. he states that in the process of manufacture, there was a value-addition to the extent of about 10% and hence, the amount of duty paid is more than the amount of credit availed in respect of the inputs. he also states that even if the contention of the department that no manufacture took place, is accepted, even then the appellants are eligible to clear the inputs as such under rule 57f(2) after reversing the credit. since the appellants have paid more duty than the credit that was required to be reversed, there can be no further demand against the appellants. in this connection, he cites the earlier tribunal's decision in the case of silvassa wooden drums v.commissioner of central excise, vapi .4. heard the learned sdr who supports the impugned order and states that since the appellants did not manufacture any goods and there was no indication on the related invoices that the goods imported and received were defective or damaged, the appellants were not eligible to take any credit at all and by taking credit, they had obtained financial accommodation for a period of time till the goods were cleared on payment of duty, which is not permissible under the law.5. after hearing both sides and perusal of the records as well as the cited case law, we are of the view that the argument of the learned sdr that the appellants have not manufactured any goods, is not substantiated by any evidence and the cited decision of the tribunal also allows the credit in similar circumstances. moreover, since the appellants have paid the duty on a higher value (sic) payment of more duty than the credit taken by the appellants, we are of the view that the duty-demand against the appellants is not sustainable. accordingly, we set aside the impugned order including the penalty imposed on the appellants and allow the appeal with consequential benefits to the appellants. the cross objection filed by the department also stands disposed off.

Judgment:
2. We find that the appellants have filed a Miscellaneous Application for rectification of the Stay Order dated 22.5.06. The learned Advocate fairly states that he appeared in that case at the time of hearing of the Stay Petition, but did not plead the ground of limitation while seeking waiver of the predeposit. The appellants have stated in the Miscellaneous Application for Rectification of Mistake that possibly the facts in their case which were put up before the Bench had got mixed up with the facts of another case taken up for hearing on the same day. We find that the Bench which heard the Stay Petition had allowed full waiver of deposit on the ground of limitation which was not actually pleaded by the appellants. However, since the appeal itself has been listed today and we have proceeding to hear and decide the appeal on merits, the Miscellaneous Application filed is of no consequence and we dismiss the same.

3. Shri Kartik Kurmy, learned Advocate appearing for the appellants states that the appellants imported the Impugned refractory bricks which were defective and damaged, filed necessary declaration in respect of the same and took credit of the Additional Duty of Customs.

He, further, states that the duty paying documents were defaced by the Jurisdictional Officers and after these bricks were put through a process of manufacture, the final products were cleared on payment of appropriate duty. He states that in the process of manufacture, there was a value-addition to the extent of about 10% and hence, the amount of duty paid is more than the amount of credit availed in respect of the inputs. He also states that even if the contention of the Department that no manufacture took place, is accepted, even then the appellants are eligible to clear the inputs as such under Rule 57F(2) after reversing the credit. Since the appellants have paid more duty than the credit that was required to be reversed, there can be no further demand against the appellants. In this connection, he cites the earlier Tribunal's decision in the case of Silvassa Wooden Drums v.Commissioner of Central Excise, Vapi .

4. Heard the learned SDR who supports the impugned Order and states that since the appellants did not manufacture any goods and there was no indication on the related invoices that the goods imported and received were defective or damaged, the appellants were not eligible to take any credit at all and by taking credit, they had obtained financial accommodation for a period of time till the goods were cleared on payment of duty, which is not permissible under the law.

5. After hearing both sides and perusal of the records as well as the cited case law, we are of the view that the argument of the learned SDR that the appellants have not manufactured any goods, is not substantiated by any evidence and the cited decision of the Tribunal also allows the credit in similar circumstances. Moreover, since the appellants have paid the duty on a higher value (sic) payment of more duty than the credit taken by the appellants, we are of the view that the duty-demand against the appellants is not sustainable. Accordingly, we set aside the impugned Order including the penalty imposed on the appellants and allow the appeal with consequential benefits to the appellants. The Cross Objection filed by the Department also stands disposed off.