Order Nos. 2579-2676/2003-Wzb/C-I, arising from Appeal Nos. E/162-169, 173-180, 183-193, 222-240, 311-312, 334-336, 322, 324-325, 329 and 332-333/97. Case: Commr. of Cus. & C. Ex., Rajkot Vs Marmo Texturisers. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Order Nos. 2579-2676/2003-Wzb/C-I, arising from Appeal Nos. E/162-169, 173-180, 183-193, 222-240, 311-312, 334-336, 322, 324-325, 329 and 332-333/97 |
| Counsel | For Appellant: Shri B.B. Sarkar, Dr, and For Respondent: Shri N.J. Gheewala and M.N. Saiyed, Advs. |
| Judges | Ms. Jyoti Balasundaram, Member (J) and Shri C. Satapathy, Member (T), Third Member On Reference : Shri S.S. Sekhon, Member (T) |
| Issue | Central Excise |
| Citation | 2005 (183) ELT 170 (Tri. - Mumbai) |
| Judgement Date | July 22, 2003 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
Jyoti Balasundaram, Member (J), (West Zonal Bench At Mumbai)
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The above appeals involve a common issue and are hence heard together and disposed of by this common order.
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The respondents herein are engaged in the manufacture of texturised/crimped yarn falling under Chapter heading 54.03 of the schedule to the Central Excise Tariff Act, 1985. Small Scale Notification No. 1/93 dated 28-2-1993 was amended by Notification No. 90/94 dated 25-4-1994 incorporating the goods falling under above mentioned chapter heading as "specified goods" for the purpose of SSI benefit which was claimed by the respondents. Subsequently, vide Notification No. 23/94-CX. (N.T.) dated 20-5-1994, Rule 56A was deleted from the Central Excise statute and Modvat benefit was extended to the product covered by chapter heading 54.03 by Notification No. 24/94 dated 20-5-1994. The department was of the view that since Notification No. 1/93 was effective from 1-4-1994, clearances from this date should be computed and not only from the date when the assessees/respondents opted for the benefit of the notification. On this basis, show cause notices were issued for recovery of the differential duty during the period after first clearance value of Rs. 50 lakhs was crossed. The demand was confirmed by the adjudicating authority against whose orders appeals were filed. The Commissioner (Appeals), i.e. the lower appellate authority set aside the order of the adjudication relying upon his earlier orders in which he had held as under:-
"The goods manufactured by the appellants had not been declared as "specified goods" from 1-4-1994 to 25-4-1994 under Notification No. 1/93 dated 28-2-1993. Therefore in absence of retrospective provision in the amendment Notification No. 90/94 dated 25-4-1994, the clearances made during 1-4-1994 to 24-4-1994 are not to be computed for concessional rate of duty under the said notification. From 25-4-1994 the goods manufactured by the appellants became "specified goods" with the amendment of Notification 1/93 dated 28-2-1993 by Notification 90/94 dated 25-4-1994. Since the appellants availed proforma credit under Rule 56A as evident from the findings of the lower authority which is reproduced above and that the said inputs and final products had not been specified in the Notification issued under Rule 57A during 25-4-1994 to 19-5-1994, the confessional rate of duty as envisaged under para 1(a)(i) is not available. However, the lower authority extended full exemption up to Rs. 30 lakhs while allowing proforma credit in his findings. This interpretation of the lower authority is not correct in view of proviso to sub-rule (2) of Rule 56A which reads as follows:
"Provided that no credit of duty shall be allowed in respect of any material or component parts used in the manufacture of finished excisable goods:--
(i) if such finished excisable goods produced by the manufacturer are exempt from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty."
Since the appellants are not availing Modvat credit and that the inputs and the finished goods are not recognised for availing the credit of duty under the notification issued in terms of Rule 57A, the concession envisaged under para 1(a)(i) is not available. At the same time the appellants are also not eligible for the nil rate of duty on goods eligible for the nil rate of duty on goods cleared up to Rs. 30 lakhs in terms of para 1(a)(ii) when they availed the Rule 56A proforma credit. Thus, during the period between 25-4-1994 to 19-5-1994, the concession envisaged under Notification 1/93 in terms of para 1(a)(i) and (ii) are not available and cannot be availed. Similarly, the appellants cannot avail also the benefit, though eligible, in terms of para 1(b) because for...
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