MEENAKSHI STEEL RE-ROLLING MILLS Vs. CCE

JUDGEMENT

(1.) FOR the purpose of hearing this appeal, appellants are required to pre -deposit Rs. 44,19,148/ - confirmed in terms of impugned orders. The short facts of the case are that appellants were issued with four show cause notices by the Superintendent of Central Excise, National Park Range, Bangalore for contravention of provision of Rule 57GG/57G in as much as they had received the input goods on stock transfer basis for conversion from M/s. Indian Iron and Steel Company Ltd., M/s. TISCO, M/s. VSP and not being a regular sale as required under Rule 57G as amended by Notfn. No. 14/95 -CE(NT) dt. 24.4.1995. Therefore, it was alleged that the modvat credit availed by the appellants on such inputs where there was no sale was irregular as per provisions of Rule 57G/57GG. The stand taken by deptt. was resisted by appellants on the ground that sale is not essential for the purpose of utilising the modvat credit. They also submitted that when job worker sells the goods on behalf of M/s. IISCO, TISCO and VSP which is the resultant of the conversion as done by the re -rollers which is relevant case in themselves, the only document that could be issued most for the purpose of transport of inputs as well as for the purpose of modvat is the invoice prescribed under Rule 57G. They further contended that in similar cases, there was outright purchase and in some other cases the inputs are received on stock transfer basis or on account conversion and therefore same is required to be accepted.

(2.) HOWEVER , this was not accepted and demands were confirmed. The Commissioner (Appeals) also rejected their pleas.

(3.) LD . Advocate submits that the Board vide their Circular No. 267/63/97 -CX dt. 9.9.1997 has clarified that the definition of "sale and purchase" under Section 2(h) of the Central Excise Act, 1944 means transfer of possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Hence, it was clarified that the transaction between depot of SAIL and their conversion agents falls within the definition of sale as given under Central Excise Act, 1944. Therefore, it was clarified that modvat credit on duty paid semies/billets will be available on the invoices issued by the depot of SAIL to their conversion agents under Rule 57G of C.E. Rules. It was also clarified that the term "sale" as appearing in the said rule qualifies only the word other premises and will not apply to the depot/consignment agents, as the case may be.