CCE Vs. FILTEX INDUS. LTD.

JUDGEMENT

(1.) None has come present on behalf of the respondents. No request for adjournment has been received. Therefore, I proceed to decide the appeal on merits after hearing the learned SDR.

(2.) In this appeal filed by the Revenue against the impugned Order -in -Appeal, the issue relates to the denial of the deemed modvat credit to the respondents in terms of Notification No. 58/97 -CE dated 30th August, 1997. The Asstt. Commissioner disallowed the modvat credit to the respondents of the disputed amount of Rs. 14,930 availed by them injury 1999 on the invoices of the inputs received by them from a manufacturer working under the Compound Levy Scheme. The learned Commissioner (Appeals) has reversed that order by observing that the invoices did bear the input manufacturers' declaration that they had discharged the duty.

(3.) I have heard both sides and gone through the record. For availing the deemed modvat credit in terms of Notification No. 58/97 -CE, two conditions are required to be fulfilled by an assessee, firstly, that he had received the inputs directly from the manufacturer, and secondly that the manufacturer had discharged appropriate duty on those inputs. So far as the first condition is concerned, the same in my view stands fulfilled, as inputs has been received by the respondents directly for the manufacturer and this aspect has not been even contested by the Department. However, the second condition of the notification, in my view, does not stand satisfied. There is no evidence on the record to prima facie prove that the inputs manufacturer had discharged the duty while working under the Compound Levy Scheme under Section 3 -A of the Act. No doubt under the law a declaration on the invoices furnished by the manufacturer, that he had discharged the duty, is to be taken to be sufficient compliance of the second condition of the notification as even observed by the Tribunal in the case of Adarsh Industries v. CCE, Chandigarh, 2002 (141) ELT 488. But in the instant case, the invoices in question did not carry/bear such a declaration. The declaration regarding the payment of duty furnished by the manufacturer on the invoices was "duty liability to be discharged under Rule 96ZP(3)", This declaration cannot be equated with a declaration "duty liability had been discharged under Rule 96 -ZP(3)". It cannot be concluded from this declaration that duty liability had been discharged by the manufacturer. There is a wide gap between duty to be discharged" and "duty discharged". The learned Commissioner (Appeals) has failed to address himself, to this aspect. It appears from the impugned order that, he had misread the declaration. In internal page 2 of the order, at the bottom, it had observed by him that invoices did bear the input manufacturers' declaration that they had paid the duty on the inputs, but on the next page he had reproduced the declaration on the invoices which reads as under - - "Duty liability to be discharged under Rule 96ZP(3)". Therefore, his earlier observations at page 2 regarding the discharge of the duty by the input manufacturers are totally contradictory to the wording of the declaration on the invoices and this has lead to the miscarriage of justice. If the Commissioner (Appeals) has properly read the declaration, he would not have come to this conclusion that duty liability had been discharged by the input manufacturers. It can be safely concluded that the duty liability was yet to be discharged by the manufacturer under Rule 96ZP(3) and it was not discharged while clearing the inputs to the respondents. Therefore, the second condition of the notification, referred to above, did not stand fulfilled and respondents could not be allowed the deemed modvat credit.