GARLON POLYFAB INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) This case is arising in second round of litigation. In the first round, an order passed by the Commissioner of Central Excise in adjudication of show -cause notice dated 15.12.94 and corrigendum thereof dated 27.10.95 issued to the appellants, was taken in Appeal (E/359/98 -NB(DB)) to this Tribunal, wherein the said order was set aside as per Final Order No. A/45572000 -NB(DB) dated 31.5.2000, whereby the case was remanded to the Commissioner for re -quantification of duty in terms of the order. The total demand of duty confirmed against the appellants under the aforesaid order of the Commissioner was to the tune of Rs. 15,53,867 and the penalty imposed on the party under the order was Rs. 3 lakhs. Pursuant to the remand order of this Tribunal, the Commissioner re -quantifid the demand of duty at Rs. 25,147, ordered appropriation of that amount from the pre -deposit (cash) of Rs. 1.5 lakhs made by the party in compliance with the Tribunal's interim order dated 6.3.98 and allowed refund of the balance amount of Rs. 1,24,853 to the party. As regards the debit of Rs. 6.5 lakhs in Modvat account, made by the party in compliance with the said order dated 6.3.98, the Commissioner allowed re -credit of the amount in their Cenvat account. The present appeal is against this decision of the Commissioner.

(2.) Before proceeding to consider the grounds of this appeal, we shall briefly refer to the aforesaid remand order (Final Order No. A/455/2000 -NB(DB) dated 31.5.2000), Three issues were settled in that order. Those issues had arisen from the following facts: Polyester Filament Yarn (texturised and non -texturised) was one of the appellants' final products. This product came to be specified for SSI exemption under Notification No. 1/93 -CE dated 28.2.93 w.e.f. 25.4.94 consequent to amendment of the said Notification by Notification No. 90/94 -CE dated 25.4.94. The appellants were clearing the product on payment of duty at normal rate under the Central Excise Tariff from 1.4.94. They continued to clear the product likewise till 6.6.94 despite the fact that the product was eligible for the benefit of exemption under Notification No. 1/93 -CE (as amended) from 25.4.94. On 7.6.94, they started clearing the goods at 'nil' rate of duty under the Notification and this continued upto 18.10.94. On these facts, disputes arose between them and the Department for the period 1.4.94 to 18.10.94 as evidenced by the show -cause notice (with the corrigendum) and the assessee's reply thereto. Eventually, the three issues came up before this Tribunal. The first issue was regarding the date of commencement of first clearances under Notification No. 1 /93 -CE (as amended) in the case on hand. On this issue, the Tribunal held that first clearances had commenced on 1.4.94 itself and all the clearances made on payment of duty from 1.4.94 should be taken into consideration for computing the aggregate value of clearances for the purpose of the Notification. The second issue considered by the Tribunal was whether the Amending Notification No. 90/94 had any retrospective effect. On this issue, it was held that the Notification was only prospective and, therefore, the benefit of SSI exemption was available to the goods from 25.4.94 only. The third issue was whether the assessee could validly opt for availing the exemption under Notification No. 1/93 -CE (as amended) from 7.6.94. It was held that the option to avail the exemption could be exercised either from 25.4.94 or from 7.6.94.

(3.) In the impugned order, the Commissioner has re -quantified the duty liability of the assessee on the basis of the above decisions of the Tribunal vide Final Order No. A/455/2000 ibid and accordingly, he worked out the total liability at Rs. 15,53,867 as under: _______________________________________________________________________ Sl.No. Period Value of clearances Amount of duty (Rs.) Paid (Rs.) _______________________________________________________________________ 1. 1.4.94 to 24.4.94 9,47,201 6,54,567 2. 25.4.94 to 6.6.94 16,91,324 11,67,010 3. 7.6.94 to 16.6.94 3,61,475 Nil 4. 17.6.94 to 18.10.94 26,38,525 Nil _______________________________________________________________________ 56,38,525 _______________________________________________________________________ From the above figures, it is clear that: - At Serial No. 1 full rate of duty has been discharged by the party when SSI exemption was not available to them under Notification No. 1/93 dated 28.2.93. - At Serial No. 2, the party paid full rate of duty on clearances whereas SSI exemption was available to them under Notification No. 1/93 as amended by Notification No. 90/94 dated 25.4.95. - At Serial No. 3, the party did not pay any duty on the clearances when SSI exemption was available to them under Notification No. 1/93 as amended by Notification No. 90/94 dated 25.4.94. - At Serial No. 4, the party did not pay any duty on the clearances when they were required to pay duty as per applicable slab of SSI exemption provided under Notification No. 1/93. Before proceeding further in the matter, it may be pertinent to mention the SSI exemption slabs provided under Notification No. 1/93. The SSI slabs are given as under: _______________________________________________________________________________ Sl. No. Value of aggregate clearances Rate of duty _______________________________________________________________________________ 1. 0 -30 lakhs Nil 2. 30 -50 lakhs Normal duty -10% i.e.60% -10%=50% BED + 15% AED on BED 3. 50 -75 lakhs Normal duty -05% i.e. 60% -5%=55% BED+15% AED on BED 4. Above 75 lakhs Normal rate of duty ________________________________________________________________________________ Keeping in view the SSI slab as provided under Notification No. 1/93 and the value of the clearances made by the party, it is noticed that the total value of clearances made during the period from 1.4.94 to 18.10.94 comes to Rs. 56,38,525 out of which 30 lakhs clearances made by the party during the period from 1.4.94 to 16.6.94 were liable to Nil rate of duty (the figures of clearances on which duty were paid has also been taken into consideration for arriving at the aggregate value of clearances for the first slab). So the party were required to pay duty on remaining value of goods i.e. Rs. 26,38,555 which they did not pay as such they were required to pay duty on Rs. 20 lakhs in the second slab of SSI exemption @ 50% i.e. 50% BED+15% AED on BED which comes to Rs. 11,50,000 and similarly they were required to pay duty on value of Rs. 6,38,525 in the third slab of SSI exemption @ 55% BED + 15% AED on BED which comes to Rs. 4,03,867. As such, the total liability of duty on value of clearance of Rs. 26,38,555 comes to Rs. 15,53,867." After examining the records and hearing both sides, we find that the duty liability of the assessee has been correctly worked out by the Commissioner. The Commissioner has adjusted the duty of Rs. 11,67,010 paid for the period 25.4.94 to 6.6.94 against the above demand of Rs. 15,53,867 and quantified the outstanding duty liability at Rs. 3,86,857. Further, Modvat credit on inputs has also been allowed to the extent of Rs. 3,61,710, leaving an amount of Rs. 25,147 as the final amount of duty to be paid by the assessee. As a matter of fact, the appellants can have no grievance against the above adjustment or against the grant of Modvat credit, nor is the Revenue in appeal against the same. Therefore, we do not find any reason to interfere with the decision of the Commissioner.