2005 (98) ECC 415 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

West Zonal Bench -- Mumbai

Shri S.S. Sekhon, Member (T) and T. Anjaneyulu, Member (J)

Dilip Chhabria Design Pvt. Ltd.

Versus

Commissioner of Central Excise, Mumbai IV

Appeal No. E/574/04 Mum

[Arising out of Order-in-Original 27/2003 dated 10.12.2003 passed by the Commissioner of Central Excise, Mumbai IV]

Order No. A/649/WZB/2004-C-II, dt. 22.7.2004, Certified on 23.8.2004

Modvat Credit

Reversal of -- Notification No. 3/2001 -- Benefit of -- Eligibility -- Held, on reversal of credits even after goods were cleared would entitle benefit of Notification -- It is on record that duty part of the credit in the RG23A register was not utilised -- Has lapsed due to appellant-assessee no longer being under Excise Act -- The stress made by Ld. DR on S.C. in Chandrapur Magnet & Wires' case 1996 (53) ECC 139 (SC), having relied on the fact of reversal being made before final goods were removed, will not be a cause to deny benefit of Notification and visit appellant for a duty demand alongwith penalty under Section 11AC only for not having reversed Modvat Credit -- That too when it has lapsed in full -- Impugned order set aside -- S. 11AC, CE Act

Appeal allowed

PRESENT :

Shri Rajiv Wagle, C.A. for the appellant.

Shri Sanjay Singhal, DR for the respondent.

Cases Cited :

1. Amco Batteries Ltd. v. CCE, 2001 (129) ELT 534............................................. [Para 1]

2. Bharat Earth Movers Ltd. v. CCE, 2001 (136) ELT 225 (Tri-Bang)....................... [Para 1]

3. Chandrapur Magnet Wires v. CCE, Nagpur, 1996 (53) ECC 139 (SC).................. [Para 1]

4. Orissa Extrusions Ltd. v. CCE, 1998 (83) ELT 308............................................ [Para 1]

Per : S.S. Sekhon

The issue in this case is the eligibility of benefit of Notification No. 3/2001 when on the duty paid chassis, brought on wheel but bodies etc. were fabricated. The appellants brought duty paid chassis and did not take Modvat credit of duty paid on such chassis. However, the credit of an amount of approx Rs. 36,246 was taken in the RG23A Part I and correspondingly entry in Part II on certain items i.e. paints, glass etc. These items like paints, glasses etc. were thereafter also used in the fabrication/construction on bodies of such chassis. The appellants have not reversed the credit availed on such paints, glasses, etc. before taking up the same for utilising the same for the bodies. Therefore, duty demands have been made and benefit of Notification 3/2001 was denied. The matter of availment of the benefit of a notification depending upon Modvat credit not taken, is no longer res integra following the decisions of the Hon'ble Supreme Court in the case of Chandrapur Magnet Wires Pvt. Ltd. v. CCE, Nagpur, 1996 (53) ECC 139 (SC) : 1996 (81) ELT 3 (SC) and Orissa Extrusions Ltd. v. CCE, 1998 (83) ELT 308 and other decisions of this Tribunal and in Amco Batteries Ltd. v. CCE, 2001 (129) ELT 534 and in the case of Bharat Earth Movers Ltd. v. CCE, 2001 (136) ELT 225 (Tri-Bang) it can be held that on reversal of credits even after the goods were cleared would entitle the benefit of the notification. In the present case it is on record that the duty part of the credit in the RG23A register was not utilised. That has lapsed due to the appellant assessee no longer being under the Excise net. The question of reversal was therefore only an exercise in accounting. The strees made by the Ld. DR on the Supreme Court in Chandrapur Magnet & Wires' case, having relied upon the fact of reversal being made before the final goods were removed, will not be a cause to deny the benefit of notification and visit the appellant for a duty demand of Rs. 16,48,780 alongwith penalty under Section 11AC only for not having reversed the Modvat credit of Rs. 36,246. That too when it has lapsed in full. In this view of the matter, following the decisions and nothing contrary being shown, this appeal is allowed, after setting aside the impugned order.

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