BHARAT ALUMINIUM CO. LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants in this case are aggrieved by the order of the Commissioner denying Modvat credit on lime (input) on the ground that the said input was exempt from duty of excise under Notification No. 106/90 -CE -dated 16.5.1990. Examined the records and heard both sides.

(2.) THE appellants are engaged in the manufacture of aluminium products, for which they used lime as one of the raw materials. During the material period, lime was exempt from duty of excise under the aforesaid Notification. The manufacturers of lime had paid duty on the product at the time of clearance to the present appellants. Credit of that duty was taken by the appellants. That credit was proposed to be denied by the department, by show -cause notice issued to the party, on the aforesaid ground. The proposal was contested by the party. The Commissioner, who adjudicated the dispute, upheld the department's view and denied the Modvat credit. Hence the present appeal.

(3.) LD . SDR, Shri A.S. Bedi, on the other hand, submits that the cited decision is based on earlier decision of the Tribunal in Eveready Industries (I) Ltd. v. CCE, Allahabad [1998 (103) ELT 672 (Tribunal)] and further that the case of Eveready Industries (I) Ltd. is distinguishable on facts. Ld. SDR further seeks to draw support from the Supreme Court's judgment in D.R. Kohli & Ors. v. Atul Products Ltd. [1985 (20) ELT 212 (SC) :, 1985 ECR 937 (SC)] to this contention that voluntary payment of excise duty on lime, though exempt under Notification, by manufacturers thereof would not entitle the appellants to take Modvat credit of such duty and avail the same for payment of duty on their final product. According to him, what is material is whether any duty of excise was payable on the inputs. If no duty is so payable, no right would accrue to the manufacturer of final product for availment of Modvat credit on the inputs. Ld. DR, therefore, urges that the order of the Commissioner be sustained.