PKPN SPINNING MILLS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) For the purpose of hearing this appeal, the appellants are required to pro -deposit a duty of Rs. 6,83,890 in terms of the impugned order. Since I propose to dispose of the appeal itself as the issue lies in a short compass, I grant waiver of pre -deposit of the amount involved and take up the appeal.

(2.) This appeal is filed by M/s. PKPN Spinning Mills Pvt. Ltd., the appellants herein, against the Order -in -Appeal No. 171/2004 -CE (SLM) dated 22.3.04 passed by the Commissioner of Central Excise (Appeals), Salem by which the Commissioner has modified the order of the original authority and allowed the appeal Hied by the department. The original authority has allowed the benefit of modvat credit on capital goods and dropped the proceedings against the appellants.

(3.) The appellants herein are manufacturers of cotton Flax blended yarn and Cellulosic spun yarn falling under Ch 52,54 and 55 and were availing Modvat Credit on capital goods under Rule 57Q. They took modvat credit of Rs. 6,83,890 on certain capital goods received by them during 4/94 to 6/94. As the intermediate product viz. Carded/Combed cotton which emerged during the course of manufacture of the final product, was not specified as final product under Rule 57Q, at the relevant time, show cause notice was issued, which culminated in the order of adjudication passed by the original authority who denied the benefit of Modvat credit. Thereupon the assessee -appellants filed appeal before the Commissioner (Appeals) who upheld the order of the lower authority. Aggrieved by the said order, they filed appeal before CEGAT and CEGAT vide order No. 86/95 dated 30.10.95 set aside the order impugned for de novo consideration of the issue of marketability of cotton carded/combed, without expressing any opinion on the merits of the case. In the de novo proceedings, the Assistant Commissioner decided the issue in favour of the assessee as noted above, against which the Revenue moved the Commissioner (Appeals) who by the present impugned order allowed the Department's appeal as aforesaid. The present appeal is against the impugned order passed in the second round of litigation.