TaxTMI 
TaxTMI 
2005 (1) TMI 520
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers, duty was paid on values excluding the value of the stainless steel containers. Both types of clearance were declared & accounts maintained. 1.4 The present impugned proceedings are, as regards declared inputs viz Stainless Steel Coils/Sheets received from dealers. They are using such steel products of various grades such as- (i) Salem AS(304) (containing 80% Nickel) from M/s. Sail through stock/registered dealers on invoices as prescribed as per rules. (ii) Salem AS-202 or SSLN-4 (both having 80% Nickel or SSLN-2 having 2% nickel, again from M/s. SAIL as above. (iii) They also procure 4% or 2% Nickel Steel from M/s. Jindal Strips Ltd. with codes J-4 or J-3 or J-l as also from other Manufacturers. This material was called Rolling Grade SS coil. AS 304 grade being better in quality than Rolling grade quality & was used generally in products for export. Steel so procured was directly sent to job-workers or also after receipt from appellants factory, for conversion into lids & containers for Tiffins/Casseroles. 1.5 A show cause notice was issued by the officers after ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anufacturers (para 5 of the order refers) (b) The purchases are fully covered by modvat invoices issued by the registered dealers or by the manufacturers as the case may be. Modvat credit is taken by the appellants either after the receipt of S.S. Steel in the factory, (where they are received direct) or after receipt of the items turned out by job workers, to whom S.S. Sheets were sent by the suppliers directly (para 4 of the order refers). (c) Modvat invoices in question are all on record and are not disputed. They show all the particulars as required in the proforma prescribed for such invoices. (d) Receipt and consumption of total quantity of S.S. Steel Coils/Sheets (both A.S. 304 and Rolling Grade) is not disputed. There is neither an allegation in Show Cause Notice nor finding in the impugned order to the contrary. (e) The appellants have been clearing their finished products i.e. "Insulated Casseroles" & "Insulated Tiffins," on payment of appropriate duty and scrap generated has been disposed off in accordance with provisions of Modvat rules. (f) &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een wrongly availed. 2.4 On consideration, of the facts, the material & submissions, the following position emerges : (a) The job workers cannot & do not know in advance, whether containers ordered on job work are meant for export or for domestic market, they therefore could not have positively asserted that they used only rolling grade in the manufacture of containers for casseroles for domestic market and A.S.304 grade was used only in the containers for export. No material exist to indicate marked difference in dimensions of the entity going into domestic or export markets. Hence their statements per se cannot be relied as evidence of substitution or non-receipt of A.S. 304 grade without any corroboratory evidence in the form of illicit receipt of rolling grade or illicit disposal of A.S. 304 grade received under Modvat invoices by the appellants. In fact it has been shown that the job workers have immediately after their statements were recorded, filed affidavits confirming having received S.S. Steel and Rolling grade materials to prepare bowls and they were made to state that only in export goods the aforesaid Salem Steel was used, whil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orroborated by drawing samples of casserols available in the godown/factory/job workers market. Failure to do so cannot be overcome merely by holding that in clandestine operations, no evidence is left behind as has been observed by the ld. Commissioner. When there was an intelligence in this regard, the officers, during their visit to the factory, Godown and job workers in pursuance of that intelligence, should have drawn samples from containers for & in the casserols meant for domestic market vis-a-vis export and got them tested. To independently corroborate the information to be reliable & valid. Reliance on so called job workers & other statements which are found to be relied & interpreted biased, meant for domestic vis-a-vis export cannot be corroborated without test. Reliance on so called job workers & other statements which are found to be relied & interpreted is a biased manner, will not justify to arrive at conclusion of ineligibility to credit. (d) The registered dealers have confirmed supply of S.S. Steel as per the invoices issued by them, which give reference to the parent invoices of the manufacturers. The manufacturers invoices show the gra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ised, is tenable, is to be accepted, to conclude that the notice itself proceeded on basis of unsustained unascertained premises. (g) Apart from the above considerations of the issue on merits, there is also a point of law arisen in this case, i.e. Show Cause Notice was issued on 3-5-2001 the entire set of Modvat rules [of which Rule 57-I(iii) is a part] had been substituted by Cenvat Credit Rules effective from 1-4-2000. The question which would arise is whether Show Cause Notice issued under Rule 57-I(ii) and impugned order confirming the Show Cause Notice invoking the above Rule are legally sustainable. Section 38A of the Central Excise Act validates the action taken under the erstwhile Rules only in cases where such rules are amended, repealed, superceded or rescinded and not where such Rules have been substituted by a new set of Rules. The issue stands settled by decision of this Hon'ble Tribunal in case of Sunrise Structural & Engineering Ltd. v. CCE, Nagpur vide Final Order No. A/711 to 722/WZB/04-CII, dated 27-8-2004 in case of appeal No. E/3182 to 3193/2002-Mum this part was however not pressed by ld. Advocate since on merits. No incorrect ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... thermoware cleared without S.S. tiffins from the factory. 2.7 On the basis of undisputed facts and having regard to the case laws applicable, the following position emerges. (a) The Department have been made aware of the fact that the appellants are clearing plastic thermo tiffins without S.S. tiffins as also such plastic wares with S.S. tiffins and they are paying Central Excise duty on the values appropriate to each item in the form in which they are cleared. Their declarations confirm the above position. They have also declared their trading activity in regard to sales from their godown of brought out S.S. containers. (b) Even assuming that these S.S. tiffins are parts of thermowares, their value cannot be notionally added in the value of plastic thermo tiffins cleared as such from the factory, because of the settled law that goods are to be assessed on the value of the goods in the form, in which they are cleared from a factory & the reliance is well placed on the following cases by the assessee. Castrol India Ltd. v. CCE - 2000 (118) E.L.T. 35 (T....