MALT CO. (INDIA) LIMITED, Vs. CCE, NEW DELHI

JUDGEMENT

(1.) The appellants were job workers at the relevant time. They used to manufacture Barley Malt and Malt extract on job work basis out of unprocessed malt extract supplied by principal manufacturers namely M/s Smithkline Beecham Consumer Healthcare Ltd. The inputs for the manufacture of the said products included barrels (Containers) supplied by the principal manufacturers. While clearing the above products to the principal manufacturers, the appellants paid Central Excise duty by availing Modvat credit on the barrels. The Department alleged that the cost of barrels were not included in the assessable value of the final products cleared by them to the principal manufacturers and, therefore, directed the party to reverse the Modvat credit availed on barrels amounting to Rs. 1,34,430.00. They also proposed to impose penalty. The appellants contested the Department's proposed action. The adjudicating authority disallowed the Modvat credit taken on barrels to the aforesaid extent for the relevant period [1994 -95] and imposed penalty of Rs. 15,000/ -. The party preferred appeal to the Commissioner (Appeals). A personal hearing was fixed. The party did not attend. The lower appellate authority examined the records and found the Assistant Commissioner's Order to be on sound ground based on the provisions of law and further found that the assessees were not entitled to Modvat credit on barrels as they had not included the cost of barrels (being packing of durable and returnable nature) in the assessable value of the aforesaid finished products in terms of Section 4(4)(d)(1) of the Valuation Rules. Hence the present appeal before the Tribunal.

(2.) I have heard both side sin the appeal as well as the present application. Since the matter is fit for a final disposal at this stage, I allow the application and proceed to dispose of the appeal itself finally.

(3.) Ld. Advocate Shri M.P. Devnath for the appellants submits that due to circumstances beyond control, the appellants were not able to attend to the hearing fixed by the ld. Commissioner (Appeals). Otherwise, it would have been possible for them to adduce sufficient evidence before that authority to establish that the price of barrels was, in fact, included in the assessable value of the processed Malt cleared by the appellants to the Smithkline Beecham Consumer Healthcare Ltd. Ld. Advocate, in this connection, submits that the Chartered Accountant's certificate covering the relevant period would conclusively prove such inclusion of the price of barrels in the assessable value. Given an opportunity, the appellants would be able to establish the said position and prove the assessee's entitlement to avail Modvat credit on barrels. He, therefore, prays for a remand of the matter to the lower appellate authority to enable that authority to decide the issue afresh in accordance with law and principles of natural justice and after considering the additional evidence which the appellants propose to adduce before that authority.