COMMISSIONER OF CENTRAL EXCISE Vs. MODI CEMENTS LTD.

JUDGEMENT

(1.) THIS is a Reference Application filed by the Commissioner of Central Excise, Raipur against the Tribunal's Final Order No. A/1066/97 -NB(DB) dt. 4 -11 -1997. In Para 8 of the Reference Application, the applicant Commissioner has formulated three questions as under:

(2.) IN the Final Order, the Tribunal had, relying on its earlier decision in Collector of Central Excise, Bhubaneswar v. Orissa Cement Ltd. 1993 (47) ECR 123 held that HDPE bags/sacks classifiable under Chapter sub -heading 3923.90 was eligible for modvat credit when used as inputs and held that the assessee's claim for modvat credit for HDPE bags as packing material for cement were eligible inputs under Rule 57A of the Central Excise Rules during the relevant period. The Tribunal had observed that it was not in dispute that the appellants had taken credit on HDPE bags in their RG. 23A Part -II on 30 -8 -1993 and had intimated it to the Department as per RT -12 Returns for the month of August, 1993 though the credit of differential duty was taken by the appellants at a much later date, after a lapse of between 33 and 69 months from the date of receipt of goods. The Asst. Collector had denied them the credit on the ground that the credit had been taken beyond the reasonable period of six months. The Tribunal in the impugned order had however, taken the view that what would be reasonable period would depend on the facts of each case and had relied on the Apex Court judgement in Government of India v. Citadal Fine Pharmaceuticals 1989 (42) E.L.T. 515 (S.C) holding that what would be reasonable time would depend on the facts of each case. The Tribunal had further observed that in the facts of the case, the assessee had taken credit within six months of the first publication of the decision of the Tribunal in Orissa Cement case and therefore even adopting the yardstick of six months as reasonable period, their claim for modvat credit would be admissible.

(3.) ARGUING the Reference Application, ld. JDR, Shri M.M. Dube contended that credit on Central Excise duty could be availed of under Rule 57A only on specified inputs used in relation to the manufacture of specified finished products. In the case of the Respondents herein, the goods falling under Chapter 63 of the Central Excise Tariff Act did not come within the eligible inputs under Notification No. 177/86 dt. 1 -3 -1986 as amended from time to time. In the case of the Respondents herein, HDPE woven bags/sacks were classified under Heading 63.01 and were assessed to duty at the factory of origin. The duty was not paid under protest. The consignees, namely M/s. Modi Cement Ltd., the Respondents therein, could not therefore avail the modvat credit on such HDPE bags in August, 1993. Therefore, no reliance could have been placed on the decision in Orissa Cement case classifying HDPE bags under Chapter Heading 3923.00 even by adopting the ratio of the Apex Court ruling in Citadal Fine Pharmaceuticals case. Therefore, ld. JDR submitted that the questions of law as formulated in the Reference Application had arisen which may be referred to the Hon'ble Madhya Pradesh High Court.