TVS SUZUKI LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE three appeals arise out of a Common Order -in -Appeal Nos. 530 to 532/97 (CBE), dated 11 -12 -97 passed by the Commissioner of Central Excise (Appeals), Trichy, whereby the Commissioner has held that the appellants herein have not proved that incidence of duty has not been passed on to their customers. He has, however, further held that the lower authority should have sanctioned the claim but should have ordered crediting the same to the Consumer Welfare Fund and to that extent he has modified the order of the Assistant Commissioner. The Assistant Commissioner had rejected the refund claim of the appellants. All these appeals involve identical issue for consideration and hence they were heard together and are taken up for disposal by this common order.

(2.) THE brief facts of the case are that the appellants are engaged in the manufacture of vehicles such as Mopeds, Motorcycles and Scooty falling under Chapter Heading Nos. 8711.10 and 8711.20. They have a separate "duty paid spares godown". The spares required for its "duty paid spares godown" are met by placing separate purchase orders. The inputs (parts/components) required for the manufacture of final products (vehicles) are met by placing separate purchase orders on the manufacture of these items. The appellants are also said to be engaged in trading activity of buying and selling spares for these vehicles. Appellants also manufacture a few spares. In such cases, the, spares are removed from the manufacturing premises to the duty paid spares godown on payment of applicable Central Excise duty. According to the appellants, at times, availability of certain spares in the duty paid spares godown becomes critical to meet the needs of the customers. To meet the requirement of spares for the dealers to whom the vehicles are sold, if the spares are available in the input stock, on which they have availed Modvat credit, under Rule 57A, they divert the spares to the Duty paid spares Godown on payment of duty applicable under Rule 57F(1)(ii). The spares are mainly parts and components which go into the manufacture of these vehicles. They availed Modvat credit on input components/parts and divert the credit availed input, to the market in case of necessity on payment of duty in terms of Rule 57F(1) of Central Excise Rules. Whenever they diverted the Modvat inputs to their spare parts duty paid godown, they have paid duty under Rule 57 -I(ii) as if such inputs are manufactured by them. After issue of Notification No. 28/95 -C.E., dated 29 -6 -95 by which the words "as if manufactured in the said factory" was removed, the credit was required to be reversed only to the extent of credit availed. Though the notification was issued on 29 -6 -95, for the period from 30 -6 -95 to 31 -7 -95. They continued to pay duty as per the unamended provisions. The refund therefore, arose consequent to amendment to Rule 57F(1)(ii) being the duty paid by them on the Modvat inputs diverted to the "spare parts duty paid godown" for the period 1 -7 -95 to 31 -7 -95. They have cleared the goods by adopting their spare parts price and rate of duty as applicable to them. Since the quantum of Modvat credit reversed for the disputed period viz. 1 -7 -95 to 31 -7 -95 was higher than the Modvat required to be reversed after the amendment, they have preferred a refund claim to the extent of excess payment of duty before the lower original authority and this was rejected both on limitation and on the ground that incidence of duty has been passed on to their buyers. Aggrieved by the said order, they preferred appeal before the lower appellate authority who by the impugned order modified the order of the original authority as noted above. It is against the order of the lower appellate authority, the appellants have come in appeal. In the grounds of appeal, they have inter alia stated that:

(3.) SHRI C. Saravanan, learned Counsel, appearing for the appellants reiterated the grounds of appeal. He has invited our attention to Notification No. 28/95 -C.E. (N.T.), dated 29 -6 -1995 and submitted that in terms of this amending Notification, where the inputs are removed from the factory for home consumption on payment of duty of excise, such duty shall be the amount of credit that has been availed in respect of such inputs under Rule 57A. He submitted that the appellants continued to pay duty before clearance of the goods as per the un -amended provisions of Rule 57F(ii) even after amendment took place to the said provisions and since they have paid duty in excess of what was required to have been paid in terms of the amended provision, they have claimed the refund, which is due to them and he prayed for allowing the appeal. He has also cited the following case laws in support of his plea for allowing the appeal.