EMPIRE INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) This is an appeal filed by the Assessee against the order passed by the Commissioner Central Excise (Appeals) Mumbai made in Order in Appeal No. RJB/7/M -II/2000 dt. 15 -02 -2000, confirming the order dtd. 01 -05 -1998 passed the Assistant Commissioner, Central Excise, Vikhroli, Division II, Mumbai -II, holding that modvat on Inn Casting, Alloy casting, Bronze casting used as input in or in relation to the manufacturer of Glass Bottles mould set which were required in the manufactured in the glass bottles would enable them to claim the same before the authority. The assessee is manufacturer of glass bottles. It availed modvat credit facility under Rule 57A of Central Excise Rule. During the course of manufactured of the glass bottles, the assessee manufacture mould which was required to be used in the manufacturer of glass bottles. Two Show Cause Notice were issued denying the modvat credit totalling of Rs. 46,449/ - of the ground that the said item were not used in or in relation to the final product viz. the glass bottles. The assistant commissioner passed the order in original confirming the 2 Show Cause Notices, denying the modvat credit and imposed a penalty of Rs. 4200/ -. Against that Order an appeal was filed before the Commissioner of Central Excise (Appeal) Mumbai -II, who, by the impugned order confirmed the Order in Original. Hence the present appeal by the assessee before me. Shri. Phene learned consultant for the appellants argued on behalf of the assessee argument that both authorities appeal for failed to take note of the provision of Rule 57D (2) of the Central Excise Rule which provided for the credit in such circumstances. The learned D.R. Shri. T.D. Bodade argued the input was used in the manufacturer of moulds which is a tool and it was not used in relation to manufacture of final product. I have considered rival submission the Clause 2 Rule 57B of the Central Excise Rule provided as follows.

(2.) Credit of specified duty allows in respect of any inputs shall not be denied or varied on the ground that any intermediate products have come into existence during the course of manufacture of final products or such inputs are used in the manufacture of capital goods as defined in Rule 57Q and that such intermediate products or capital goods, as the case may be, are for the time being exempt from the whole of the duty of excise leviable thereon or chargeable to 'nil' rate of duty. The said provision clearly provided for non denied of modvat credit for manufacture of intermediate product or capital goods which has been used in the manufacture in rival products. Even if I accept the arguments of learned D.R. on behalf of the department that the mould are tools, the said tools are included in the definition clause of term capital goods. In view of the above provision of Rule 57D (2) of the Central Excise Rules modvat credit can not be denied as moulds are intermediate product in the manufacturer of Glass bottles. I, therefore, set aside the order passed by the Commissioner Central Excise (Appeals) and declare that the denial the modvat credit in this case is wrong in law. Appeal is allowed setting aside impugned order. Consequential relief is ordered. (Pronounced in Court)