AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 205
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....yable of duty by notification or chargeable to nil rate of duty. It is the case of the appellant that respondent No.1 availed credit of duty paid on the capital goods in the month of July, 1997. However, the records maintained by respondent No.1 indicated that they were not receiving raw material for production of any dutiable excisable goods, but were being used exclusively for processing of input/semi process goods on job work basis under Rule 57F(4) of the said Rules which are exempted under notification No.214/86 dated 25th March, 1986. A show cause notice was issued on 14th November, 1997 to respondent no.1 to show cause why the inadmissible credit should not be disallowed by the Superintendent, Central Excise, Bicholim. Reply was filed and after the parties were heard, the Assistant Commissioner, by order dated 14th December, 1998, disallowed the Modvat credit, amounting to Rs. 28,03,670/-. On 29th June, 1999, the appeal filed by respondent No.1 was allowed by the Commissioner (Appeals) by remanding the matter to the Assistant Commissioner by giving a specific direction to consider whether respondent No.1 had followed all the prescribed procedure in toto as laid down under su....
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....t of agreement dated 8.10.1997. It was further submitted that both the authorities had erred in relying on the said judgment. Secondly, it was submitted that the factual aspects were not considered by the lower authorities and, therefore, it was contended that the matter should be remanded to the CESTAT with direction to consider the factual aspects. Reliance was placed on the judgment of the Apex Court in the case of Commissioner of Central Excise, Indore vs. Cethar Vessels Limited and others, reported in (2009) 17 SCC 551. It was submitted that both the authorities had erred in relying on subrules 4 to 7 of Rule 57T, since the said rules were applicable with effect from 1st March, 1997 and the goods which are covered by the show cause notice were received prior to 1st March, 1997 and, therefore, the requirement of Rule 57T(2) would apply and not Rule 57T(4) which came into effect from 1st March, 1997. It was contended that the provisions of sub-rules 4 to 7 of Rule 57T came into force after the receipt of capital goods in the factory. It was contended that the respondent no.1 had followed the provisions of earlier Rule 57T(1) and 57T(3) and had not followed the correct procedure ....
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....th respondent No.2. Reliance was sought to be placed on the order passed by the Assistant Commissioner, after remand, dated 26th April, 2000 wherein he had held that from the agreement of merger, it would could be seen that it was agreed between the parties that the Modvat account lying in the excise account of Rudra Industries shall be responsible for all its liabilities on its own after 31st July, 1997 and no liability shall fall on ACGL on account of agreement dated 8th October, 1997. It was, therefore, submitted that in view of the said finding, the ratio of the judgment of Bajaj Tempo Ltd., (supra) was not applicable to the facts of the present case. Secondly, it was submitted that factual aspects were not considered by the lower authorities and, therefore, it was contended that the matter should be remanded to CESTAT with a direction to consider the factual aspects. Reliance was placed on the judgment of the Apex Court in the case of Commissioner of Central Excise, Indore vs. Cethar Vessels Limited and others (supra). It was further submitted that the authorities had erred in relying on sub-rules 4 to 7 of Rule 57T, since the said rules were applicable with effect from 1st Ma....
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....tion. In any event of the matter, since the appellants unit has been taken over by ACGL., who are manufacturing dutiable final products, the MODVAT credit on the capital goods in question is legally available to them, in terms of Rule 57S(5) of the Central Excise Rules 1944." 10. The Commissioner (Appeals) had, therefore, clearly held that the appellant's unit had been taken over by the ACGL which are manufacturing dutiable final products and the MODVAT credit on the capital goods in question was legally available to them in terms of Rule 57S(5) of the Central Excise Rules, 1944. This finding of fact was confirmed by the CESTAT. The CESTAT in its judgment and order dated 2nd June 2005 has clearly observed in paragraph 3 as under:- "3. After hearing both sides, and considering the material, it is found:- (a) the plea of Revenue to deny capital goods credit to goods exempted under Notification No.214/86 when such capital goods are exclusively used for such purposes would not be in consonance with the decision in the case of Bajaj Tempo Ltd. wherein Notification No.217/86 and No.214/86 was the subject matter for consideration ....