COMMISSIONER OF CENTRAL EXCISE COIMBATORE Vs. CUSTOMS EXCISE AND GOLD CONTROL APPELLATE TRIBUNAL SOUTH REGIONAL

JUDGEMENT

(1.) THIS is a petition filed by the Revenue under Section 35-H of the Central Excise Act, 1944, to direct the first respondent Tribunal to state the case on the following question of law set out in the petition for its opinion:

(2.) THE assessee engaged in the manufacture of Drip Irrigation System claimed exemption in respect of the HDPE/ldpe pipes cleared during the period 1. 10. 1995 to 4. 3. 1996, used in manufacture of Drip Irrigation System. The contention of Revenue is that in the course of inspection of the Departmental officials at the unit of the assessee on 5. 3. 1996, it was found that the HDPE and LDPE pipes were manufactured and cleared by the assessee in the guise of parts of drip irrigation system. The pipes were classifiable under Chapter Heading 3917 of the Central Excise Tariff Act, 1985. They are parts of general use and not meant for use solely and principally with Drip Irrigation System and hence not exempt from payment of duty as parts of the Drip Irrigation System. Drip Irrigation System and parts fall under Heading 84. 24 exempt from duty in terms of NOM No. 56/95 CE dated 16. 3. 1995. The Revenue's contention is that the said pipes manufactured were not exempt items. The Revenue viewed that since the assessee cleared the HDPE/ldpe Pipes along with other bought out items and used in the assembly of the Drip Irrigation System at the site of the customer, the exemption from duty was not available. However, concessional rate as per Notification 1/93 was applied resulting in a demand of Rs. 39,70,085/- and allowed the assessee to avail the MODVAT credit of duty pass on the inputs used in the manufacture of the said pipes. The assessee preferred appeal before the Customs Excise and Gold (Control) Appellate Tribunal against the duty levied and the Revenue also preferred an appeal on extending the MODVAT credit, on the view that the assessee was not entitled to have the benefit of MODVAT credit in the absence of any declaration filed in accordance with the provisions of the Act. It is stated that the appeal filed by the assessee as against the classification issued has not reached finality. However, the appeal preferred by the Revenue before the Customs, Excise and Gold (Control) Appellate Tribunal was dismissed by applying the decision of the Supreme Court in the case of M/s. Formica India Division Vs. Collector Of Central Excise reported in 1995 (77) ELT 511 (SC) that the assessee was entitled to have the benefit of MODVAT credit under Rule 57-G. Aggrieved by the same, the Revenue preferred Reference Application before the first respondent Tribunal to refer the matter to the High Court on the following question of law:

(3.) THE first respondent-Tribunal dismissed the said application in Reference Order No. 112/99 dated 15. 10. 1999 holding that the order in appeal was passed following the decision of the Supreme Court in M/s. FORMICA INDIA DIVISION Vs. COLLECTOR OF CENTRAL EXCISE reported in 1995 (77) ELT 511 (SC ). Hence, no referable question of law arose. The aggrieved Revenue has filed the Reference Case Petition seeking a direction to the Tribunal to state the case on the question of law referred to above.