CCE Vs. DEVI POLYMERS (P) LTD.

JUDGEMENT

(1.) THIS appeal filed by the Revenue is directed against the order in Appeal No. 4/2001 (M -II) dated 16.1.2001 passed by the Commissioner of Central Excise (Appeals), Chennai, by which the Commissioner has allowed the appeal of the assessee -respondents holding the Modvat Credit cannot be denied on the ground that the inputs were received from the job workers after processing after the expiry of the stipulated period of 180 days.

(2.) THE brief facts of the case are that the assessee -respondents are engaged in the manufacture of Polyester Resins etc, falling under Chapter 39 and 84 of the CETA and were availing the benefit of Modvat Credit. They sent out inputs to various job workers under Rule 57F(4) after deducting 10% of the value of the inputs in terms of Rule 57F(6). The inputs were received back beyond the stipulated period of 180 days and hence a show cause notice was issued to the assessee -respondents proposing to demand Modvat Credit irregularly availed under Rule 57 -I and the show cause notice culminated in the order of adjudication passed by the original authority vide order in original No. 38/2K dated 30.4.2000 by which he has confirmed a duty demand of Rs. 5,33,229/ -on the ground that all the inputs have been received back after the stipulated period of 180 days and hence differential credit taken has to be reversed. Aggrieved by the said order, the assessee -taken has to be reversed. Aggrieved by the said order, the assessee -respondents filed appeal before the Commissioner (Appeals) and the Commissioner (Appeals) allowed the appeal as noted above. The Revenue has come in appeal against the order of the Commissioner (Appeals) on the ground that:

(3.) SHRI KR Natarajan, learned Counsel for the respondents on the other hand submitted that Rule 57F(11) is not applicable inasmuch as the inputs after having been processed have been returned to the sender. He has further submitted in cases where the inputs have been returned by the job worker, Rule 57F(7) will be applicable. He also submitted that no demand for Modvat Credit can be raised under Rule 57 -I and in support of his plea he relied upon the case law referred to and relied upon by the lower appellate authority in the case of UP Twiga Fibre Glass Ltd. v. CCE, Meerut reported in 1998 (28) RLT 858 : 1998 (74) ECR 548 (T) and again for the same party reported in 1999 (32) RLT 721.