LIBERTY SHOES LTD. Vs. CCE, NEW DELHI

JUDGEMENT

(1.) These three appeals have been filed by the appellants against the common impugned order in appeal dated 24.5.2000 passed by the Commissioner(Appeals) vide which he had affirmed the order in original dated 30.9.97 of the Assistant Commissioner disallowing modvat credit and imposing penalty also on them.

(2.) The facts giving rise to these appeals may briefly be stated as under:

(3.) The appellants were engaged in the manufacture of footwear.They availed modvat credit on the carry bags during the period April 1996 to November 1996 of the amounts; i.e. Rs.2,78,252/ - (appellants no.1), appellant no.(2), Rs.4,45,750/ - and appellant no.(2) and Rs.4,94,488/ - (appellant n,3). But the modvat credit was not admissible to them on that item under R eing not inputs as per the Explanation (b) to Rule 57 -A of the Rules.They were accordingly served with show cause notices for the recovery of the amounts and penalty was also proposed to be imposed on them for availing the modvat credit illegally.Those notices were contested by them.In their reply they avered that the modvat credit was admissible to them under Rule 57 -A of the Rules on the carry bags being the inputs.They also relied upon Notification of "input" through this notification, stood widened so as to make all the inputs eligible for modvat whether used directly or indirectly in the manufacture of the final product by the manufacturer.They also avered that the cost of the carry beg was include by them in the assessable value of footwear under Section 4(4)(d)(i) of the Central Excise Act.The Assistant Commissioner, however, did not accept this version of the appellants and confirmed the demands of the amounts as detailed above and also imposed penalty of Rs.5000/ - each on the appellants through order in original dated 30.9.97. This order, however, was challenged by the appellants but Commissioner(Appeals)through the impugned, affirmed the same.