2004 (97) ECC 274 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(B)

Shri S.S. Kang, Member (J) and Shri C.N.B. Nair, Member (T)

Atma Tube Products Ltd.

Versus

CCE, Chandigarh

Appeal No. E/1508/2004/B

[Arising out of Order-in-Appeal No. 1165/CE/CHD/03 dated 28.11.2003 passed by the Commissioner of Central Excise (Appeals), Chandigarh]

Final Order No. 650/2004-B, dt. 6.8.2004, Certified on 23.8.2004

Modvat Credit

Steel Tubes -- Manufacture of -- Remand proceedings to the adjudicating authority with the direction that the appellant will substantiate their claim in respect of Modvat credit under Rule 57H of Central Excise Rules. In the application seeking permission to avail the credit, the appellant gave a detail of GP-1s vide which the duty was paid on these CR strips. Further vide letter dated 15.7.94 appellant supplied the original duty paying documents i.e. GP-1s to the Revenue. The receipt of this letter is not disputed by the Revenue. The adjudicating authority simply brushed aside this letter by saying that appellants might have written this covering letter without supplying the duty-paying documents. The appellants have substantiated their claim. The impugned order is not sustainable. [2000 (71) ECC 10 (SC) Followed]

Appeal is allowed

PRESENT :

Shri Gagan Kohli, Adv. for the appellant.

Shri Vikas Kumar, SDR for the respondent.

Case Cited :

CCE v. Hindustan Lever Ltd., 2000 (71) ECC 10 (SC) (Followed)............................ [Para 6]

Per : S.S. Kang

Heard both sides.

2. The appellant filed this appeal against Order-in-Appeal whereby the benefit of Modvat credit was denied to the appellant. The brief facts of the case are that the appellants are engaged in the manufacture of steel tubes. Prior to 1.3.94 the steel tubes were exempted from payment of duty, therefore, the appellants were paying duty on the intermediate product i.e. C.R. Strip. On 1.3.94 the exemption granted to the steel tubes was withdrawn and the steel tubes were liable to duty. The appellants filed a declaration vide letter dated 8.3.94 under Rule 57H of Central Excise Rules for taking credit in respect of the duty paid inputs used in the steel tubes which are lying in stock. The show-cause notice was issued on 18.8.94 on the ground that the credit was taken without prior permission of the Assistant Collector. The adjudicating authority confirmed the demand. The appellant filed appeal and the Commissioner (Appeals) also dismissed the appeal. On appeal filed by the appellant the Tribunal vide Final Order No. A/969/2001/NB-D dated 17.10.2001 remanded the matter to the adjudicating authority with the direction that appellant will furnish proof before the adjudicating authority for claiming the Modvat credit on the amount in question under Rule 57H of Central Excise Rules.

3. In pursuance to the remand order, the adjudicating authority again confirmed the demand on the ground that the appellant had not produced the original duty paying documents i.e. GP-1s. The Commissioner (Appeals) also dismissed the Appeal of the appellant on the same ground.

4. The contention of the appellant is that the appellant vide letter dated 15.7.94, in reply to the letter written by the Revenue, supplied details of the particulars of the inputs on which the appellant wants to avail the Modvat credit under Rule 57H and also supplied the original duty paying documents i.e. GP-1s. The contention is that the receipt of this letter is not denied by the Revenue and the credit was denied on the ground that the original duty paying documents were not produced by the appellant. The contention is that in the application seeking permission to take credit under Rule 57H the appellant has given the details of GP-1s vide which the duty was paid in respect of steel strip and this payment of duty is not disputed by the Revenue as the appellant had paid duty in respect of intermediate product and all the duty paying documents were produced by them. Therefore, the credit cannot be denied on the ground the appellant failed to substantiate their claim.

5. The contention of the Revenue in the remand order is that the Tribunal gave a specific direction to the appellant that they will produce the documents in support of their claim and as the appellant failed to produce the original duty paying documents they are not entitled for the benefit of Modvat credit under Rule 57H of Central Excise Rules.

6. The Revenue relied upon the decision of the Hon'ble Supreme Court in the case of CCE v. Hindustan Lever Ltd., 2000 (71) ECC 10 (SC) : 2000 (120) ELT 3 (SC) to submit that in the remand proceedings the coordinate benches cannot go beyond the direction given in the remand order.

7. We find that in this case the initial show-cause notice issued by the Revenue was only on the ground that under the provisions of Rule 57H of Central Excise Rules, the credit was taken without prior permission. The matter was agitated by the appellant up to the Tribunal level and the Tribunal remanded the matter to the adjudicating authority with the direction that the appellant will substantiate their claim in respect of Modvat credit under Rule 57H of Central Excise Rules. In view of the decision of Hon'ble Supreme Court relied upon by the Revenue, being a coordinate bench, we are bound by the direction contained in the remand proceedings. Now the issue before us is whether the appellant has substantiated their claim for taking Modvat credit in respect of inputs used in the final product which was lying in stock when the final product becomes dutiable. The Revenue is not disputing the fact that inputs in respect of which the credit is claimed are not used in the final product or the final product was not lying in stock. The inputs in respect of which the appellant is claiming credit are manufactured by them and these are intermediate product such as CR strips and on which the appellants were regularly paying duty. In the application seeking permission to avail the credit, the appellant gave a detail of GP-1s vide which the duty was paid on these CR strips. Further vide letter dated 15.7.94 appellant supplied the original duty paying documents i.e. GP-1s to the Revenue. The receipt of this letter is not disputed by the Revenue. The adjudicating authority simply brushed aside this letter by saying that appellants might have written this covering letter without supplying the duty-paying documents. As the appellants were paying duty in respect of intermediate products, as final product was exempted from payment of duty and this fact is not denied by the Revenue and Revenue is not seriously contesting the receipt of the original GP-1s., therefore, now Revenue cannot say that appellant failed to prove their claim hence the impugned order is not sustainable and is set aside. The appeal is allowed. The appellants are entitled for consequential relief, if any, in accordance with law.

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