Dismissed
Comm. Central Excise Commissionerate, Ldh. v. M/S Happy Forging, Ldh.
Punjab & Haryana HCCEA/187/2010
Case brief
from the order text
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COURT OF PUNJAB AND HARYANA AT CHANDIGARH.…
What the court decided
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COURT OF PUNJAB AND HARYANA AT CHANDIGARH.…
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.
C.E.A. No.187 of 2010
Date of decision: 4.1.2011
Commissioner of Central Excise.
-----Appellant.
Vs.
M/s Happy Forging Ltd.
-----Respondent
CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
Present:Mr. Sukhdev Sharma, Standing Counsel for the appellant/revenue.
ADARSH KUMAR GOEL, J.
This appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (for short, “the Act”) against the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi dated 21.1.2010 proposing to raise following substantial questions of law:-
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another case of the Noticees relating to earlier periods allowed their appeals vide Order in Appeal No.350-351/CE/Appl/Ldh/04 dated 19.04.2004 (copy enclosed) and set aside the orders-in-original demanding reversal of credit. The same view is also taken in the case of Modi Sales, Ludhiana vide Order-in-appeal No.139/CE/CHD/06 dated 27.02.06. In the case of Modi Sales, their earlier order-in-original on the same issue has already been accepted by the department as mentioned in this order-inappeal. In addition to this, the Ld. Assistant Commissioner, Central Excise Division-I, Ludhiana has already in case of M/s Ludhiana Steel Rolling Mills, Ludhiana dropped the demand under similar set of circumstances vide order-in-original No.75/CE/AC/LDH-I/05 dated 30.12.2005. In view of these judgments, the show cause notice does not stand and the same merits to be dropped.”
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judgment of the Hon’ble Supreme Court in CCE v. Ballarpur Industries Ltd. (2007)8 SCC 89.
“8. It is to be seen that the whole purpose of the notification and the Rules is to streamline the process of payment of duty and to prevent the cascading effect if duty is levied both on the inputs and the finished goods. Rule 57-D(2), which has been extracted hereinabove, shows that in the manufacture of a final product an intermediate product may also come into existence. Thus in cases where an intermediate product comes into existence, even though no duty has been paid on the intermediate product as it is exempted from whole of the duty or is chargeable to nil rate of duty, credit would still be allowed so long as duty is paid on the final product.
9. In cases of manufacturers like the appellants, the final product is the tractor. The intermediate product would be parts which are manufactured for being used in the tractor. In such a case the parts would not be the final product. Thus Rule 57-C would have no application. The
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mere fact that the parts are cleared from one factory of the appellants to another factory of the appellants would not disentitle the appellants from claiming benefit of Notification No. 217/86-CE dated 2-4-1986. As stated above, the notification itself clarifies that the inputs can be used within the factory of production or in any other factory of the same manufacturer.
10. Mr Lakshmikumaran relied upon the decision of this Court in the case of CCE v. Hindustan Sanitaryware & Industries (2002) 7 SCC 515, wherein in respect of this very notification, this Court has held that so long as duty is paid on the final product, the mere fact that duty was not paid on the intermediate product would not disentitle the manufacturer from the benefit of Notification No. 217/86-CE dated 2-4-1986. In that case, the input was plaster of Paris, the intermediate product was moulds made out of the plaster of Paris, the final product was sanitaryware. In our view, the facts of that case are identical to the facts of the present case. The ratio laid down therein fully applies to this case.
11. In this view of the matter, we set aside the impugned judgment and the order of the Commissioner of Central Excise. It is held that the appellants will be entitled to MODVAT credit on duties paid for the inputs used for manufacture of parts, so long as the parts are used in the manufacture of tractors on which duty is paid. We clarify that in respect of parts which are sold in the open market and/or used for manufacture of tractors on which no duty is paid, the benefit of Notification No. 217/86-CE dated 2-4-1986 may not be available.”
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As regards the judgment of the Hon’ble Supreme Court in Ballarpur Industries Ltd. , therein the issue was not of effect of the notification dated 25.3.1986, which has been invoked in the
present case. The said judgment is, thus, distinguishable.
The appeal is dismissed.
(ADARSH KUMAR GOEL) JUDGE
January 04, 2011 (AJAY KUMAR MITTAL) ashwani JUDGE
Colour shows how this judgement treated each authority
Sterlite Industries Ltd. v. CCE, PuneReferred¶18
Sterlite Industries Ltd. v. CCE, Pune 2005(68) RLT 25
Escorts v. CCERelied on¶30
Escorts v. CCE 2004 (171) ELT 145=(2004) 7 SCC 214 · Who else cites this
CCE v. Ballarpur Industries Ltd.Distinguished¶40
CCE v. Ballarpur Industries Ltd. (2007)8 SCC 89 · Who else cites this
CCE v. Hindustan Sanitaryware & IndustriesApplied¶36
CCE v. Hindustan Sanitaryware & Industries (2002) 7 SCC 515 · Who else cites this
3 provisions across 3 enactments
Commissioner of Central Excise
M/s Happy Forging Ltd.
ADARSH KUMAR GOEL
AJAY KUMAR MITTAL
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court