N.K. CHEMICALS INDUSTRIES Vs. CCE

JUDGEMENT

(1.) BRIEFLY stated the facts of the case are as under: - -

(2.) 1.1 The appellants are engaged in the manufacture of washing and cleaning powder under the brand names - -'Naya Kiran' and 'Nilma'. They filed a Classification List effective from 8.2.1990 classifying the said product under heading 3401.10 chargeable to Central Excise Duty @ 5% adv. Inasmuch as the Department was of the view that the appellants product is properly classifiable under sub -heading No. 3402.90, the assessment were made provisional. During the period from February, 1990 to March, 1991, the appellants cleared their product by paying the duty @ 5%, as claimed by them, and after availing the benefit of MODVAT Credit of Duty paid on the inputs. Their Classification List was approved by the Assistant Commissioner under heading 3402.90 vide his Order -in -Original dated 27.3.1991. Consequently, demand of duty of Rs. 5,23,589.40 (Rupees five lakh twenty -three thousand five hundred and eighty -nine and paise forty) as differential duty, was also raised against them. The same was confirmed by the Assistant Commissioner vide his Order dated 4.2.1997. The said Order dated 4.2.1997 passed by the Assistant Commissioner confirming demand of duty against the appellants, was challenged by them before the Commissioner (Appeals) The appellants before the appellate Authority agreed that their goods are classifiable under heading 3402.90, but submitted that in that case, they would be eligible for the benefit of Notification No. 101/66 -CE. The benefit of the said Notification was denied by the Assistant Commissioner in his Order on the ground that the appellants do not satisfy the conditions of the said Notification, inasmuch as they had availed the MODVAT Credit of Duty paid on the inputs, thus making them non -dutiable. Before the Commissioner (Appeals), the appellants, however, contended that they were ready to reverse the MODVAT Credit taken on the raw materials. Accordingly, the Commissioner (Appeals) vide his Order dated 20.7.2000 held as under: - -

(3.) ON the other hand, the Revenue's stand is that the Order -in -Appeal dated 20.7.2000 passed by the Commissioner (Appeals) has clearly directed that the MODVAT Credit availed by the appellants should be reversed so as to earn the benefit of Notification No. 101/66. The appellants had also admitted before the Commissioner (Appeals) for such reversal. As such, the appellants are bound to pay the MODVAT Credit in cash, which has already been utilised by them. Learned J.D.R. submits that as regards the duty paid on their final product, the appellants are at liberty to claim the refund of same. In any case, the duty so paid by them already stands recovered from their customers.