RAMA PHOSPHATE LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) IN these two appeals, the issue involved is whether M/s. Rama Phosphates Ltd. are liable to pay the duty on the inputs namely Tin plates found short in their factory and whether the assessable value of Tin containers was not correctly arrived at.

(2.) SHRI Ashutosh Upadhyay, learned Advocate, submitted that the Appellants manufacture Tin containers falling under Chapter 73 of the Schedule to the Central Excise Tariff Act and vegetable oil falling under Chapter 15 of the Tariff; that the Tin containers manufactured by them are used captively for packing oil manufactured by them; that the Tin containers are exempted under Notification No. 10/96 -C.E., dated 23 -7 -96; that, however, as the Department directed them to pay the duty on Tin containers, they were discharging the duty liability on tin containers after availing of Modvat credit of the duty paid on inputs. He further submitted that the Assistant Commissioner, under the Adjudication Order Nos. 20 -21/2000 dated 31 -5 -2000, has confirmed the demand of Central Excise duty on the ground that the Central Excise officers on visiting their factory premises found the stock of tin plates less by 21.880 MT and the assessable value of the tin containers was computed incorrectly. He further submitted that as the tin containers are exempted from payment of duty, no duty liability can be attached to them under the Excise Act for shortage of this stock of tin plates or on account of under -valuation of the goods. He relied upon the decision in the case of Mihijam Vanaspati Ltd. v. Commissioner of Central Excise, Jamshedpur -2001 (129) E.L.T. 631 (Tri).

(3.) COUNTERING the arguments, Shri Jagdish Singh, learned Departmental Representative, submitted that the issue involved in the Appeal is not that the goods manufactured by them are exempted from payment of duty; that the issue involved is that the inputs namely tin plates in respect of which Modvat credit was availed of by them were found short when the Central Excise officers visited the factory; that accordingly, the credit to that extent has to be reversed as the said quantity of tin plates has not been used in or in relation to the manufacture of the final products namely tin containers; that further as Modvat credit is availed of by the Appellants, the duty is payable on tin containers and as assessable value has not been determined correctly, the duty is also demandable from them on this count.