MUKAND LTD. AND ORS. Vs. CCE

JUDGEMENT

(1.) APPEALS taken up for disposal with the consent of both sides, and after waiving deposit of duty demanded and penalties imposed.

(2.) APPELLANT , in appeal E/3228/98 M/s. Mukand Ltd., manufactures, in its factory at Kalwe, stainless steel wire rods. These wire rods were sent to its factory at Kurla where they were subjected to the processes of annealing and pickling. The annealed and pickled wire rods were thereafter exported. By a declaration dated 25.9.1992 received in the office of the jurisdictional Assistant Collector on the same day, the assessee's its factory at Kurla, intimated its intention to avail of the Modvat credit on the duty paid on the unannealed and unpickled wire rods. Since the final product did not pay duty having been exported, under the claim of rebate which was granted, the credit so taken was utilised towards payment of duty on similar products cleared for home consumption. The assessee continued to take credit in this manner.

(3.) THE assessee, in reply to the notice, disputed that the processes did not amount to manufacture. It contended that as a result of these processes changes were made in the internal structure of the metal in the wire rods and increased their ductility, rendering them suitable for the applications for which they were intended. It was also contended that the extended period of five years would not be available to the department. The assessee had made it clear, by its declaration under Rule 57G and by classification list filed on the same day that what it was doing in the factory was subjecting the wire rods received from the kalwe plant to process of annealing and pickling. There was therefore no mis -declaration or suppression of facts or any intention to evade duty. Liability to penalty of the assessee and the employees was also questioned.