INDIA JAPAN LIGHTING LTD. Vs. CCE

JUDGEMENT

(1.) M/s India Japan Lighting Ltd., the appellants herein, challenge the Order -in -Appeal No. 109/2002(M -II) dated 30.8.2002 passed by the Commissioner of Central Excise (Appeals), Chennai), by which the Commissioner has upheld the order of the original authority and rejected the appeal filed by the appellants. The original authority held that the benefit of Modvat Credit is admissible only to the extent of the additional duty of Customs actually paid and not leviable on the goods.

(2.) The brief facts of the case are that the appellants are engaged in the manufacture of Automotive Lighting Equipment such as Lamps, rear combination lamps, licence plate lamps room lamps, front signal lamps etc. all falling under chapter 85 of the CETA, 1985. They avail Cenvat Credit/Modvat Credit on the inputs viz. Phoenix brand bulbs supplied by M/s Maruti Udyog Ltd. (M/s MUL) and used in the manufacture of their final products meant for M/s MUL. The Phoenix brand bulbs are purchased by M/s MUL from M/s Phoenix Lamps India Ltd. which is a 100% EOU situated at Noida Export Processing Zone,. Noida; These bulbs were cleared by M/s Phoenix Lamps India Ltd. under DTA clearance procedure in terms of Notification No. 2/95 -CE dated 4.1.95. It was noticed by the department that the appellants had availed credit of full duty amount shown in the invoice of M/s MUL as Basic Excise duty. The Basic excise duty shown in the invoice of M/s MUL included all the customs dvities paid by M/s Phoenix under Notification No. 2/95 -CE dated 4.1.95. M/s MUL have passed on Modvat/Cenvat Credit of the entire amount of duty paid on the Hologem Lamps purchased from M/s Phoenix India Ltd. including the basic customs duty, surcharge SAD etc. instead of the amount equal to the additional duty of customs paid on the goods by M/s Phoenix and supplied to M/s MUL. It was in this circumstances show cause notice was issued to the appellants proposing to disallow the wrongly availed credit of Rs. 12,86,9i5 under Rule 57I/57AH of the (sic) and also to impose penalty under Rule 173Q and the show cause notice culminated in the order of adjudication passed by the original authority wherein he has held that the appellants are eligible to the credit of duty equal to the Additional duty of Customs paid and not Additional duty of Customs leviable. The lower appellate authority agreed with the view taken by the original authority and rejected the appeal filed by the appellants. Aggrieved by the said order of the lower appellate authority, the appellants have filed this appeal.

(3.) Shri R. Swaminathan, learned Counsel appearing for the appellants submitted that they have received the inputs from M/s MUL and the said supplier has passed on the entire duty of excise paid by them to the appellants and thus they are entitled to take the entire credit as passed on to them by the supplier. He has further submitted that even assuming that the goods were supplied by a 100% EOU in terms of Notification No. 2/95 -CE dated 1.4.95, they are entitled to take credit to the extent of Additional Duty of Customs leviable on the goods. In support of his plea he has invited our attention to the Larger Bench judgment in the case of Vikram Ispat v. CCE, Mumbai and submitted that the issue is covered by the said judgment and prayed for allowing the appeal. He has also filed copies of the order passed by the North Regional Bench in the case of M/s Maruti Udyog Ltd, v. GCE, New Delhi in Appeal No. E/1972/2002 -NB(DB) decided on 27.12.2002 and also their subsequent decision in the case of same assessee in Appeal No. E/1459/2003 -NBC dated 17.11.2003. In both decisions the North Regional Bench has followed the ratio in the case of Vikram Ispat v. CCE, Mumbai . The learned Counsel therefore, prayed for allowing the appeal.