GTN TEXTILES LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) BY this stay application, the applicant is seeking waiver of pre -deposit of Rs. 12,20,409 being the Modvat credit on capital goods which has been denied to the appellants.

(2.) THE learned Chartered Accountant Sri Subramanyam submits that the Commissioner (Appeals) had heard the appellants only in the stay matter on 8th December, 1998 and on 09.12.98, he disposed of both the stay application as well as appeal by a non -speaking order upholding the view given by the Assistant Commissioner without a detailed discussion on the issues raised by the appellants. He submits that the Commissioner had been explained on the aspect of non -requirement of pre -deposit, as they have not yet taken the credit into account. They have explained to the Commissioner that the appellants being export unit they were entitled to Modvat credit on capital goods. However, they had also drawn pari materia benefit under Rule 57G and Notification No. 217/86 alongwith Rules 56CA and 191BB of the Central Excise Rules. However, the appellants were not given any findings on these points therefore, he submits that the impugned order being a non -speaking order, full waiver and stay is required to be granted. He also submits that the matter may be remanded to the original authority itself for the reason that for the subsequent periods the Assistant Commissioner has clearly understood the issue and has granted sanction of rebate vide his order dated 14.05.99. He placed a copy of the said order before us. He further submits that the issue has been appreciated by the Tribunal in similar circumstances of the case in the case of Orissa Synthetics Ltd. v. C.C.E. as , wherein the Tribunal had held that input credit is admissible for manufacture of intermediate products which are cleared to another factory under bond under Rule 191B/191BB of the Central Excise Rules for export production. The Tribunal noted that the products so cleared under bond cannot be treated as goods wholly exempt or chargeable to Nil rate of duty. He points out that the authorities had proceeded on mistaken belief as the main final product multiple cotton count is exempted from duty and, therefore, Modvat credit is not admissible. He contends that the goods were removed to another unit for the purpose of conversion for cotton yarn and thereafter they were exported under bond. Therefore, he submits that the citation referred to would clearly apply to the facts of the present case. He also refers to the Board's Circular in F.211/2/73 -CX dated 3.4.75 issued by the Ministry of Finance, Department of Revenue in Circular No. 10/75 -CX -6 which clarifies the present position. He contends that this aspect of the matter has not been looked into by the original authority, hence he prays that the matter could be remanded to the original authority.

(3.) THE learned DR Smt. Aruna Gupta contends that the authorities did not have an occasion to look into the Board's Circular as well as the judgment of Tribunal in the above cited case and as the authorities have taken a different view thereafter by sanctioning rebate in the matter. She has no objection for remand of the matter to the original authority.