M.K. ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants are engaged in the manufacture of excisable goods. During the material period (Jan. to June, 1997), they were availing the facility of Modvat credit on inputs under Rule 57A of the Central Excise Rules, 1944 after filing the necessary declaration under Rule 57G of the said Rules. During the said period, they removed inputs (after taking Modvat credit of the duty paid thereon) from their factory to job worker's premises under Rule 57F(4) for further processing and return. While doing so, in some instances, they debited an amount equal to the Modvat credit taken, under Sub -rule (6) of Rule 57F. When, in such cases, the processed inputs were returned by the job worker and received by the appellants in their factory for the manufacture of final product, the appellants took recredit of the entire amount which was debited at the time of dispatch of the inputs to job worker. The original authority found that excess credit of an amount of Rs. 17,438/ - was so taken by the appellants in excess of 10% of the value of the goods permitted under Sub -rule (7) read with Sub -rule (6) of Rule 57F. It disallowed the excess credit. In some other instances, the processed inputs returned by the job worker were received in the appellant's factory beyond the period of 60 days prescribed under Sub -rule (11). The entire credit of duty of Rs. 32,364/ - taken by the appellants on such inputs was disallowed by the original authority on the ground that the legal requirement of return of the goods within the prescribed time limit of 60 days had not been fulfilled. The original authority also disallowed a credit of Rs. 4,044/ - on the ground that no corresponding debit had been made by the appellants on expiry of the above period of 60 days. The authority also disallowed a credit of Rs. 650/ -on the ground that the appellants had, while removing the inputs under Sub -rule (4) to the job worker, debited an amount which was less by Rs. 650/ -than 10% of the value of the goods. Aggrieved by the decision of the original authority, the appellants preferred appeal to the Commissioner (Appeals). But that appeal was unsuccessful. Hence the present appeal.

(2.) The appellants have requested for a decision on merits by dispensing with personal hearing. They have, however, reiterated the main grounds of the appeal in their written submissions filed on 25 -11 -2002. In respect of the credit of Rs. 17,438/ -, they have submitted that such credit was taken correctly in terms of Sub -rule (7) of Rule 57F in as much as whatever amount was debited under Sub -rule (6) was recredited under Sub -rule (7). The appellants have relied on the Tribunal's decision in CCE v. SAIL [2001 (137) E.L.T. 457 (T) = 2000 (40) RLT 1064]. In respect of the credit of Rs. 32,364/ -, the appellants have contended that it was not permissible to disallow the credit on the ground of the procedural lapse of the processed inputs being received in the appellants' factory beyond the period of 60 days. In this connection, they have relied on the decision of the Tribunal in Arunachal Plywood Industries Ltd. v. CCE [1992 (62) E.L.T. 830]. They have also relied on the decision in U.P. Twiga Fibre Glass Ltd. v. CCE [1999 (32) RLT 721]. In respect of the credits of Rs. 4,044/ - and Rs. 650/ -, the appellants have claimed that these amounts are part of the above amount of Rs. 32,364/ -. They have also challenged the penalty of Rs. 10,000/ - imposed by the original authority and sustained by the lower appellate authority.

(3.) Ld. DR has endeavoured to justify the orders of the authorities below.