LML LTD. Vs. CCE, KANPUR-I

JUDGEMENT

(1.) THE brief facts in the case are that the appellants manufacture scooter and parts thereof, They filed a refund claim of Rs.3,65,447.00 on 9.1.99 with the Deputy Commissioner of Central Excise, Division -II, Kanpur on the ground that they had cleared capital goods namely, "Moulds and Dies" to their job worker M/s Belmaks Automotives Ltd. on payment of duty under Rule 57S(2) of the Central Excise Rules, 1944. These moulds and dies were cleared during the period 14.7.98 to 28.8.98 by debiting the duty in their RG 23C part -II account by issuing the invoices. It is stated that they wanted to clear the said capital goods to the job worker under Rule 57S (8) without payment of duty. It is submitted that the said job worker was working under Rule 57F (4) and did not have the facility for availing modvat credit. On realising their mistake they applied to the Assistant Commissioner for granting the permission under Rule 57S (8) which was given to them on 19.3.99. They submitted that the mistake of despatch of the capital goods under a wrong rule was discovered during December, 1998 and immediately the corrective action was initiated within six months of time. They stated that the permission of the Assistant Commissioner was required under this rule for removal of the capital goods without payment of duty and the same was granted to them on 19.3.99. It is further stated they had started getting these goods back in their factory from their job worker. These submissions made by the party are considered by the Dy. Commissioner of Central Excise in his order dated 14.6.99 but he has rejected the refund claim with the observations that the goods were rightly removed as per the provisions under Rule 57S (2) on payment of duty. It is stated that the party had cleared the goods to M/s Belmaks under Rule 57S (2) between the periods from 14.7.98 to 28.8.98 and the refund claim is received in the Divisional Office after lapse of five months from the clearance of the goods under Rule 57S (2) from the factory. It is stated that as the party did not make the disclosure regarding removal of the moulds and dies already made by them to the job workers while applying for the permission under Rule 57S (8), the permission granted to them on 19.3.99 under Rule 57S (8) was reviewed and the same was withdrawn vide letter dated 14.6.99. With these observations, the Dy. Commissioner has rejected the refund claim of the party. The party filed an appeal but the Commissioner (Appeals), Ghaziabad vide his order dated 16.2.2000 dismissed the appeal of the party with the following observations : -

(2.) THE present appeal is against the above order of the Commissioner (Appeals). I have heard Sh. R. Santhanam, Advocate for the appellants and Sh. A.K. Jain, JDR for the respondents. The ld. Advocate for the appellants laid great emphasis on the fact that the mould and dies were sent to their job worker as capital goods and they were permitted to be cleared and brought back without payment of duty under the provisions of Rule 57S (8). It is stated that though the permission as required under the Rule for sending out these goods was not obtained. The same was however applied for and also given subsequently but it was withdrawn without giving them any opportunity to explain their case. In this regard, the ld. Advocate relied on the decision of the Larger Bench of the CEGAT in the case of Piaggio Greaves Vehicles Ltd. Vs. CCE, Pune -I [2001 (127) ELT 614 (Tri -LB)]. Sh. A.K. Jain, JDR for the respondents reiterated the findings arrived at by the original authority as well as Collector (Appeals) in their respective orders.

(3.) I have considered the submissions made before me. As can be seen from the above, the appellants have filed the refund claims for the duty paid on sending the mould and dies to their job worker under the provisions of Rule 57S (2) which they say was not required to be paid since they were entitled to clear and receive them back without payment of duty under the provisions of Rule 57S (8). The relevant provisions under Rule 57S as existed at the relevant time are re -produced below: -