C.C.E. Vs. SMITHKLINE BEECHAM CONSUMER

JUDGEMENT

(1.) IN this appeal of the department, the challenge is against the permission granted by the Commissioner (Appeals) to the respondents for transfer of input -duty credit lying unutilized in their unit at Bangalore as on the date of closure thereof, to their new unit at Chengalpet. The amount of credit allowed to be so transferred is Rs. 37,23,609/ -.

(2.) AFTER examining the records, we note that the plant and machinery in the Bangalore unit was shifted to Chengalpet in August - September 1994. At that time, input -duty credit of Rs. 18,35,018/ - was lying unutilized in RG23A Part II account of the Bangalore unit. Input -duty credits totalling to about Rs. 18.00 lakhs had, by then, been transferred from the Rajamundry unit of the appellants to the Bangalore unit. Thus the total input -duty credit lying unutilized in the Modvat account of the Bangalore unit, at the time of transfer of credit from that unit to the Chengalpet unit was Rs. 37,23,609/ -. The Chengalpet unit took the credit and utilized it for payment of duty on final product, whereupon the original authority having jurisdiction over them asked them to reverse the credit under Rule 57(1) of the Central Excise Rules, 1944. The appeal filed by the party against the denial of credit was allowed by the Commissioner (Appeals). Hence the present appeal of the Revenue.

(3.) FROM the records it appears that the Commissioner of Central Excise, Bangalore having jurisdiction over the erstwhile Bangalore unit of the appellants had permitted transfer of the above credit to the Modvat account of the Chengalpet unit in terms of Rule 57F(7) of the Central Excise Rules, 1944 as applicable to the relevant period. A copy of letter dated 26 -8 -97 of the Assistant Collector, Bangalore, wherein the decision of the Commissioner was communicated to the party has been produced by learned Counsel today. The said letter reads as under: