TITAN INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal No. 154/2000 (M -III) dated 23.11.2000 by which the learned Commissioner (Appeals) has restricted the modvat credit of 95% stipulated under Notification No. 14/98 -CE (NT) dated 2.6.1998 involving the goods notified under Rule 57A as well as 57J and he had rejected their appeal.

(2.) AGGRIEVED by this order, the appellants have come in appeal on the ground that Rule 57J is an independent provision within the Modvat scheme and Rule 57J has an non -obstante clause and therefore nothing in Rule 57A of CER' 44 would apply in respect of transactions under Rule 57J. Appearing on behalf of the appellants, the learned Advocate Shri R. Raghavan submits that Rule 57J is an independent provision and has an non -obstante clause and therefore nothing in Rule 57A of CER'44 would apply in respect of transactions under Rule 57J of the rules ibid. In this connection, he has invited my attention to the judgment of West Regional Bench, Mumbai in the case of Ballarpur Industries Ltd. v. CC, Nagpur in which it has been held that non -obstante clause, as per law of interpretation, prevails over the provisions of the clause sought to be excluded under Notification 177/86 -CE issued under Rule 57J. He, further, submits that on the same analogy, Rule 57J overrides the provisions of 57A or any provisions thereunder. He, therefore, submits that modvat credit of 100% should have been allowed and not restricted to 95%.

(3.) APPEARING on behalf of Revenue, learned JDR Shri A. Jayachandran submits that provisions of Rule 57A provide for allowing input credit on such inputs which have been used in or in relation to the manufacture of the final products and there was no provision to allow such modvat credit on intermediate products. The Modvat credit on intermediate product is allowed under Rule 57J which has been inserted by Ministry of Finance by Notification No. 197/86 -CE dated 14.3.1986 whereas Rule 57A was inserted by Notification No. 176/86 -CE dated 1.3.1986. He submits that it was in order to allow modvat credit on intermediate products that Rule 57J has been added. He further, submitted that as per Notification No. 5/94 dated 1.3.1994 as amended by Notification No. 14/1998 dated 2.6.1998, modvat credit to the extent of 95% of the duty paid has been restricted. This notification remained in force up to March 1999 whereas appellants have availed the modvat credit in the month of Feb 1999 when the restriction of 95% credit was in force. He, further, submitted that the judgment cited by the Counsel is not applicable because that was interpretation of Rule 57B in which in order to encourage small scale industries and to allow goods to be bought from small scale industries, the modvat credit was allowed to be taken to the effective rates even if duty was allowed to be taken at the concessional rate by the SS industries. He, therefore, submitted that this being the situation, the modvat restricted to 95% has been rightly ordered by the learned Commissioner (Appeals.)