VIKRAM ISPAT Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN these appeals filed by M/s. Vikram Ispat (A Unit of M/s. Grasim Industries Ltd.) and M/s. Kundalia Industries, references have been made to the Larger Bench on the question of quantum of Modvat credit of the duty paid on inputs available to them under Rule 57A of the Central Excise Rules read with Notification No. 5/94 -CE., dated 1 -3 -1994.

(2.) BRIEFLY stated the facts are that M/s. Vikram Ispat manufacture H.P. sponge Iron and avail of Modvat credit of the duty paid on inputs under Rule 57A of the Central Excise Rules. One of the inputs is Iron Ore Pellets which is either imported, procured from domestic manufacturer or procured from 100% Export Oriented Undertakings (100% E.O.U.). Notification No. 2/95 -C.E., dated 4 -1 -1995 provides the effective rate of duty of excise on goods manufactured in a 100% E.O.U. and cleared to the Domestic Tariff Area (D.T.A.). According to Notification the duty payable under Section 3 of the Central Excise Act will be 50% of each of the duties of Customs leviable under Section 12 of the Customs Act read with any other notification for the time being in force provided that the amount of duty payable shall not be less than the duty of excise leviable on the like goods manufactured by a manufacturer in DTA. In case of procuring of Pellets from 100% E.O.U., the quantum of Modvat credit is determined in terms of Notification No. 5/94.

(3.) THE learned Counsel emphasised that under Section 3 of the Central Excise Act, the nature of levy is excise duty whereas the measure of duty is under Customs Act; that the Revenue wants to restrict the quantum of Modvat credit to the constituent of Additional Customs duty which is part of the excise duty paid by an 100% E.O.U. while removing the goods to DTA.