COMMISSIONER OF CENTRAL EXCISE Vs. AARTI STEELS LIMITED

JUDGEMENT

(1.) The respondent herein is engaged in the manufacture of alloy and non-alloy steel wire and it availed the benefit of Modvat credit during the period from March, 1996 to May, 1996 and cleared 162.192 Metric Tons of tyre bead wire to M/s. Ralson India Ltd. and another manufacturer of tyres. The respondent availed the benefit of Modvat credit amounting to Rs. 4,19,189/- on the inputs used in the manufacture of this wire. The Department denied the benefit to the manufacturer on the ground that bead wire is used for the manufacture of tyres which are exempt from payment of excise duty and, therefore, no Modvat credit could be claimed in view of the provisions of Rule 57C of the Central Excise Rules, 1944 (for short the Rules). The matter was taken up in appeal before the Commissioner who decided the issue in favour of the manufacturer holding that tyre bead wire is not exempt from payment of excise duty and, therefore, the respondent herein was entitled to claim Modvat benefit in regard to the inputs which go into the manufacture of that bead wire. Feeling aggrieved by the order of the Commissioner, the Department filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi which dismissed the same by its order dated 12-1-2001. It is against this order that the Department has filed the present petition under Section 35H(1) of the Central Excise Act for a mandamus requiring the Tribunal to refer the question of law which according to it arises from the order dated 12-1-2001.

(2.) We have heard the learned Counsel for the parties and are of the view that no referable question of law arises from the order of the Tribunal. A plain reading of Rule 57C of the Rules would make it clear that a manufacturer is entitled to the benefit of Modvat credit in regard to the inputs provided the final product is not exempt from the payment of excise duty. It is common case of the parties that bead wire manufactured by the respondent is not an exempt item. It is, therefore, clear that the respondent was entitled to claim Modvat benefit in regard to the inputs that went into the manufacture of bead wires in terms of Rule 57C of the Rules. Since no referable question of law arises, the petition is dismissed.