Cimmco Birla Ltd.

vs Cce on 8 January, 2004

Customs, Excise and Gold Tribunal - Delhi

Cimmco Birla Ltd. vs Cce on 8 January, 2004
Equivalent citations: 2004 (92) ECC 582
Bench: A T V.K., P Bajaj
ORDER V.K. Agrawal
1. The issue involved in this appeal filed by M/s. Cimmco Birla Ltd. relates to disallowance of
Modvat Credit of the duty paid on inputs.
2. Shri K.K. Anand, learned Advocate, submitted that the appellants manufacture railway wagons
and parts thereof; that a show cause notice dated 3.7.98 was issued to them for disallowing the
Modvat Credit taken by them during the period for Dec., 97 to April, 98 on the ground that the
Modvat Credit had been taken after the physical consumption of inputs and removal of the final
product; that in their reply they mentioned that since the railway wagons were manufactured on
behalf of the Indian Railways, they were under the genuine bona fide belief that the wagons were
exempt from duty in terms of Notification No. 64/95 dated 16.3.95 which completely exempted all
wagons supplied to Indian Railways from duty; that they were, subsequently, informed by the
Ministry of Railway in 1997 that wagons supplied against 'Own Your Wagons Scheme' were liable to
excise duty. Thereafter, they discharged the duty on the impugned wagons; that in the facts and
circumstances of the case they had committed certain technical errors in making appropriate date
entries in the Modvat register for the purpose of documenting the physical receipts; that the
Assistant Commissioner, however, in the Order-in-Original No. 66/01 dated 29.8.01 disallowed the
Modvat Credit; that the Commissioner (Appeals) in Order-in-Appeal No. 47/03 dated 10.2.03 had
rejected their appeal on the ground that they had failed to advance any documents before the
Adjudicating Authority to establish that the inputs were used with reference to wagons cleared
earlier under payment of duty. The learned Advocate, further, submitted that as the duty on the final
product was discharged only after clarification received from Indian Railways, the inputs could not
be physically available at the time of availment of Modvat Credit; that substantive benefit of Modvat
Credit cannot be disallowed on technical/venial breach of procedure as held in the case of
Decorative Laminates (I) P. Ltd. v. CCE, 1995 (61) ECR 652; that as their factory is closed, the
necessary documents could not be furnished to the Assistant Commissioner for verification and all
these documents are available with them and an opportunity should be given to them to produce
those documents for verification,
3. Countering the arguments, Sh. Kumar Santosh, Ld. SDR, submitted that the Modvat Credit has
been disallowed on the ground that they had failed to prove that the inputs were used in the
manufacture of wagons which were cleared under the "Own Your Wagon Scheme"; that after the
issuance of the show cause notice dated 3.7.98, the matter was initially adjudicated by the Assistant
Commissioner under Order-in-Original No. 126/98 dated 31.3.99, which was remanded by the
Commissioner (Appeals) under Order-in-Appeal No. 713/00 dated 17.7.2000 with the direction to
the appellants to establish with the documents that inputs were used with reference to wagons
cleared earlier without payment of duty; that in spite of this, clear remand order passed by the
Commissioner (Appeals) in 2002, when the matter came up for de novo adjudication before the
Asstt. Commissioner, they did not submit any evidence to show the correlation of the inputs with
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Cimmco Birla Ltd. vs Cce on 8 January, 2004

reference to wagons cleared earlier; that the Assistant Commissioner has, disallowed the Modvat
Credit and confirmed the demand; that even when the matter was fixed for personal hearing by the
Commissioner (Appeals) on 19.4.02, 17.6.02, 30.10.02 and 24.1.03, no one appeared on behalf of
the appellants; that they have also not submitted any documentary evidence before the
Commissioner (Appeals); that the appellants cannot, therefore, make use of this appeal before the
Tribunal for getting the matter again remanded as sufficient opportunities had been afforded to
them.
4. We have considered the submissions of both the sides. It has not been rebutted by the learned
Advocate for the appellants that the Commissioner (Appeals) under Order-in-Appeal No.
713/KDT/CE/JPR/2000 dated 17.7.2000 had remanded the matter to the Assistant Commissioner
with specific direction to the appellants to establish with the documents that the inputs were used
with reference to the wagons cleared earlier without payment of duty under 'Own Your Wagon
Scheme'. It is also not disputed by the appellants that the direction in the remand order was neither
carried out before the Assistant Commissioner nor even before the Commissioner (Appeals). When
the matter has been remanded by the Commissioner (Appeals) with specific direction under
Order-in-Appeal which has not been challenged by the appellants, it cannot now be claimed by them
that these are only procedural or technical requirements for which substantive benefit of Modvat
Credit should not be denied. Sufficient opportunities had been extended to establish the nexus
between the inputs and the railway wagons which had not been availed of by them. As the remand
direction was not complied with by the appellants, we do not find any infirmity in the impugned
order passed by the Commissioner (Appeals). We, therefore, find no merit in the appeal which is
rejected.

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