SUPREME INDUSTRIES LTD Vs. CCE

JUDGEMENT

(1.) THIS is an appeal filed by the appellant against the decision dated 27.1.1994 made in Order -in -Appeal No. PCJ -22/B. 111/94 whereunder for the purpose of the valuation of the product the excise duty paid on input raw material in regard to which Modvat credit availed of was included.

(2.) THE appellants were engaged in the manufacture of plain polyethylene films falling under sub -heading 3920.31 of the CETA from the plastic raw maters rials, namely LDPE films and HOPE films falling under sub -heading 3901.10 and 3901.20 on which appropriate excise duty was paid. The appellants opted for Modvat credit as both the raw materials as well as the final product. The said polyethylene films were captively utilised by transferring the films to their printing department. They did not pay the duty on the polyethylene films second time as the films suffered duty already. They filed a price list claiming that normal price was not available under Section 4(1)(a) of the Act but they worked out the normal price under Section 4(1)(b) read with Rule 6(b)(ii) of the Central Excise (Valuation) Rules. The Assistant Collector issued a show cause notice dated 2.12.1992 proposing to add the Modvat credit availed of on the input raw materials for the purpose of valuation in the final product. By the order -in -original dated 4.1.1993 the Assistant Collector denied the pleas made by the assessee for not including the Modvat credit availed on input raw materials for the purpose of valuation against which an appeal was filed. In the order -in -appeal the Collector (Appeals) sought to follow the judgment of the Tribunal in Sree Srinivasan Foundry v. CCE which sought to follow the judgment of the Supreme Court in the case of Empire Industries Limited 1986 (20) ELT 179 : 1985 ECR 1169 (SC) : ECR C 797 SC and also the Tribunal's judgment in Khaitan Fans (P) Ltd. . Hence the present appeal.

(3.) SHRI B.N. Rangwani, learned consultant appearing on behalf of the appellants, contended that for purpose of valuation of the final product the excise duty paid on input raw materials and in regard to which Modvat credit was availed is not includible while arriving at the cost of intermediate product used for captive consumption under Section 4(1)(b) of the Act. He also relied on the judgment of the larger bench of the Tribunal in the case of Dai Ichi Karkaria Ltd. v. CCE .