CCE Vs. VIKRAM INDUSTRIES

JUDGEMENT

(1.) THIS appeal filed by the Revenue is directed against the Order -in -Appeal No. 41/2000 (CBE) (MJ) dated 11.5.2000 passed by the Commissioner of Customs and Central Excise (Appeals) Trichy, by which the Commissioner has allowed the appeal of the party holding that the assessee -respondents are eligible to the benefit of Modvat credit on inputs procured for conversion on job charge basis.

(2.) THE brief facts of the case are that the respondents are manufacturers of electrical stampings. They received raw materials viz. HR electrical silicon sheets from various parties. They have also procured raw material from M/s Ellen Industries Coimbatore for conversion into electrical stampings on job work basis. On receipt of the materials they availed Modvat credit on the basis of five invoices issued by M/s Ellen Industries and utilized the same for payment of duty on their finished products. The department took the view that in terms of Notification No. 32/94 dated 4.7.94 as amended by Notification No. 14/95 dated 20.4.95 the invoice issued by the dealer is an eligible document for availing Modvat credit only when there was sale and inasmuch as in the instant case there had been no sale in the invoice issued by M/s Ellen Industries, the credit was inadmissible. No show cause notice was issued as the party waived the right of issue of show cause notice. Adjudication order was accordingly passed confirming the demand of duty and imposition of penalty, vide Order -in -Original No. 165/96 dated 25.10.96. Aggrieved by the said order, the party moved the Tribunal and Tribunal vide Final Order No. 2404/98 dated 18.11.98 accepted their arguments to the effect that the order of the Commissioner was not a speaking order and the matter was remanded for de novo consideration. In the de novo proceedings, the Additional Commissioner confirmed the duty demanded and appropriated the amount already paid. The appellants filed appeal against that decision before the Commissioner (Appeals), who by the impugned order allowed the appeal of the party. Revenue aggrieved by the said order of the Commissioner (Appeals), has come in appeal.

(3.) SHRI A. Jayachandran Learned JDR appeared for the Revenue and reiterated the grounds of appeal and submitted that the transaction between the supplier of the goods and the job worker is not a sale. The goods are supplied to job worker free of cost on the term that the final products manufactured are returned to the supplier and the job worker is entitled for job charges only and there was no sale involved in the present transaction between the appellant and the ownership of the goods is not transferred. Therefore, the documents covering the transaction cannot be considered as eligible Modvat documents in terms of Notfn. No. 32/94 -CE (NT) as amended by Notification No. 14/95 -CE (NT) dated 20.4.95 which prescribes that "invoice means a document issued by a Registered person for sale of goods and which contains such details as are prescribed by the Board. He has also invited my attention to the order of the Larger Bench of the Tribunal in the case of Balmer Lawrie and Co. Ltd., 2000 (116) ELT 364 regarding the powers of the Tribunal. He has also cited the Judgment of the Hon'ble Apex Court in the case of Commissioner of Wealth Tax v. Smt. Hashmatunissa Begum, 1989(40) ELT 239 (SC) regarding rule of construction when there are two reasonably possible views.