Final Order No. A/703/98-NB and Stay Order No. S/576/98-NB arising from in E/Stay/685/98-NB in Appeal No. E/740/98-NB. Case: G.T.C. Industries Ltd. Vs Commissioner of Central Excise, Vadodara. Central Information Commission

Case NumberFinal Order No. A/703/98-NB and Stay Order No. S/576/98-NB arising from in E/Stay/685/98-NB in Appeal No. E/740/98-NB
CounselFor Appellant: Shri L.P. Asthana, Advocate and For Respondents: Shri Sanjeev Srivastava, JDR.
JudgesShri A.C.C. Unni, Member (J) and C.N.B. Nair, Member (T)
IssueCentral Excise Rules, 1944 - Rule 57A
Judgement DateAugust 14, 1998
CourtCentral Information Commission


C.N.B. Nair, Member (T), (Northern Bench At New Delhi)

  1. This stay application of G.T.C. Industries Ltd. is directed against denial of Modvat credit of over Rs. 59 Lacs in respect of Cut Tobacco and imposing a penalty of over Rs. 60 Lacs under adjudication Order No. 89/Demand/97, dated 19-11-1997 of the Commissioner of Central Excise, Baroda.

  2. The facts of the case are that the appellants are cigarette manufacturers and Cut Tobacco is the main raw material in the manufacture of cigarettes. Cut tobacco was liable to duty and the duty paid on cut tobacco was set off against the duty payable on cigarettes at the time of clearance of cigarettes under Notification No. 355/86, dated 24-6-1986. Modvat credit was extended to cigarettes under Notification No. 69/95, dated 16-3-1995 and simultaneously notification providing for set off duty was rescinded. The Modvat claim in dispute in the instant case relates to the cut tobacco contained in the cigarette in stock and rip tobacco in stock, (rip tobacco is cut tobacco obtained by slitting of rejected cigarettes).

  3. The appellants'' claim was that under Rule 57H they were entitled to Modvat credit on the quantity of input contained in the finished stock and in the rip tobacco. They have accordingly applied for permission for taking the Modvat credit on this to the jurisdictional Assistant Collector, who eventually, pursuant to a Court order, informed them that they could take credit on their own. The impugned order denies the credit so taken by the appellant.

  4. Arguing the case, Sh. L.P. Asthana, ld. Advocate submitted that the denial of Modvat credit is totally against the provisions of law. He contended that Rule 57H authorises the taking of credit on the goods lying in stock.

  5. He also submitted that the Collector''s order denying the credit was illegal and that credit had been allowed to be taken by the Assistant Collector in an order pursuant to an order of the Hon. High Court of Gujarat and that order having not been taken up for review and appealed against, it became final. He also submitted that as all the facts were known to the Central Excise authorities demand made during the extended period as provided under Proviso to Section 11A(1) of the Central Excise Act was not tenable. He also submitted that the show cause notice as well as the adjudication order proceeded on the assumption that the appellant was trying to take double benefit (set off as well as Modvat credit) as it was...

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