SHIPRA STEEL ROLLING MILLS Vs. CCE JAIPUR-I

JUDGEMENT

(1.) THE appellants are manufacturers of Steel Rolling Products falling under heading No. 7217.90. These products are covered by the compounded levy Scheme by virtue of Section 3A of the Central Excise Act, 1944 with effect from 1st August 1997. Prior to this date, they were availing modvat credit under Rule 57A of the Central Excise Rules, 1944 on the input items declared by them. On 1.8.97, they had certain inputs lying in stock with them and also contained in the finished and the semi -finished goods in their possession. The modvat credit amounting to Rs. 285692/ - was assessed to have been availed by appellants in respect of such input items which were neither used nor were likely to be used in on in relation to the production of final products with effect from this date. Therefore, they were issued a show cause notice dt 29.1.98 calling upon them to show cause why the aforesaid amount should not be recovered from them as they had failed to pay the amount under Rule 57F (1) read with Section 11A and why the penalty should not be imposed on them. After considering the reply of the appellant, the Assistant Commissioner of Central Excise, Sikar Division in his order dt 16.6.99 has observed that vide notification No.33/97 -CE (NT) dt 1.8.97 any credit of specified duty laying un -utilised on 1.8.97 with the manufacturer of Hot Rolling products who were required to pay duty under Section 3A had lapsed and not allowed to be utilised for payment of duty on the excisable goods. He has further observed that the modvat credit taken at the time of receipt of inputs was only provisional unless the inputs were used in accordance with Rule 57A and Rule 57F. He relied on the judgement of Allahabad High Court in the case of Super Cassette Industries reported in 1997 (94) ELT 302 (Allahabad). Consequently he confirmed the demand of aforesaid amount on the appellants apart from imposition of penalty of Rs.1000/ - on them.

(2.) ON appeal by the party, Commissioner (Appeals), Jaipur dismissed their appeal with the observation that Rule 57 I (2) stipulates that if any inputs in respect of which credit has been taken are not fully accounted for as having been disposed off in the manner specified in this Section, the manufacturer shall pay the duty leviable on such inputs within three months from the date of receipt of this notice of the demand. He also observed that in this case the inputs lying as such and contained in the finished goods have not been used in the manufacture of specified final product therefore, the provisional credit taken in RG -23 A does not become final and has to be reversed or paid in cash.

(3.) THE present appeal is against the above order of Commissioner (Appeals). The matter is listed for hearing the stay petition filed by the appellants. The appellants are not represented. They have sent a communication dt 24.1.2001 in which they have requested for the stay petition to be disposed of on merits. They have also stated that they have suffered a heavy loss in the year ending 31st March, 2000 and that their factory is closed since 1.9.99. Shri K.Panchat Charam, JDR reitrated the findings arrived at by the original as well as appellate authorities in their respective orders.