COMMISSIONER, CENTRAL EXCISE GOA Vs. MRF LIMITED

JUDGEMENT

(1.) We have heard the learned Counsel appearing for the appellant and Senior Advocate Mr. Usgaonkar with Ms. Pimenta for the sole Respondent.

(2.) The appellant (hereinafter referred to as Revenue for short), has challenged the Order passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT for short) in Appeal No. E/1385/02 dated 30.03.2004. Respondent, (hereinafter referred to as Assessee for short) is Limited Company, registered under the Companies Act, 1956. It is not in dispute that the respondent is engaged in manufacturing tyres of Animal Drawn Vehicles. It is the contention of the assessee/respondent that the Furnace Oil is an input used as a fuel during the manufacturing process of the final product i.e. tyres drawn by animal vehicles. According to respondent, they are entitled for such Modvat credit.

(3.) Joint Commissioner of Customs and Central Excise, Panaji, Goa, had issued show cause notice to the respondent dated 24.08.1999, which is on record (Page 17). It has been stated in the show cause notice that during the period of April 1997 to May 1998 and August 1998 to June 1999, the assessee had availed Modvat Credit of Rs. 1,82,980/- on Furnace Oil falling under Chapter heading 2710.90 under Rule 57-A of Central Excise Rules 1944, (Rule 1994 for short). According to Revenue, such availment of the Modvat Credit period is inadmissible and respondent-manufacturer is not eligible for such Modvat Credit under Rule 57A of Central Excise Rules, 44 and recoverable under Rule 57(1)(ii) of Central Excise Rules, 1944. Ultimately, respondent-manufacturer was called upon to show cause, mainly on alleged irregular Modvat Credit amounting to Rs. 1,82,980/-and further was called upon to show cause as to why penalty should not be imposed on respondent under Rule 173Q of the Rules of 1944.