Commissioner of Central Excise vs SNL Industries P. Ltd.

J.K. Ranka, J.—This instant Central excise tax reference application is directed against the order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, (for short "Tribunal") in Appeal No. E/2449/99-NB(S), dated May 1, 2000. The brief facts as emerging on the face of record is that the assessee is a manufacturer of ordinary portland cement falling under sub-heading 2502 10 of the Schedule to the Central Excise Tariff Act, 1985. It is claimed by the assessing officer that the assessee filed a declaration under rule 57G of the Central Excise Rules, 1944 on June 22, 1994 declaring P. P. bags as inputs to the assessing officer, this was not correctly claimed and an offence case was registered on August 18, 1994 involving an amount of Rs. 48,628 in the light of exclusion clause (vi) of the Central Excise Rules, 57A. However the assessee had reversed the input credit of Rs. 48,628 on November 28, 1994.

It is observed by the Assistant Commissioner, appellant that despite of the above fact and the assessee having reversed the credit of Rs. 48,628 on November 28, 1994, during visit by the officers again of the appellant-Department on May 17, 1995, it was observed that the assessee had shown a balance of Rs. 2,313 on August 19, 1994 and thereafter had taken credit of Rs. 29,124 till October 28, 1994. That the assessee availed of credit of Rs. 16,650, leaving a balance of Rs. 14,787 on October 28, 1994 and this balance stood lapsed as the assessee appeared to have opted out of the Modvat scheme. Further on being pointed out that the assessee debited the amount of Rs. 14,337 on May 22, 1995. It is because of this default that the assessee was asked as to why the credit so wrongly taken should not be denied and recovered and why a penalty should not be imposed upon them under rule 173Q(1)(bb) for contravention of rule 57A of the Central Excise Rules, However, the contention of the assessee, inter alia, was they stopped availing of Modvat credit of duty paid on P. P. bags immediately after receipt of the earlier show-cause notice dated October 27, 1994. That they availed of credit of Rs. 29,124 from August 19, 1994 to October 28, 1994, and that the issue stood resolved by Order-in-Original No. 54/1994, dated November 30, 1994 denying the Modvat on the P. P. bags. It was further contended that penal provisions of 173Q were not applicable in the facts and circumstances of the case, and in the light of judgment of the hon''ble apex court in the case of Hindustan Steel Ltd. Vs. State of Orissa,

The assessing officer was not satisfied and observed that the assessee was aware and reversed the input credit on November 30, 1994 and despite of this factum again made the wrong claim and it is only after again show cause that the input credit was reversed on being pointed out by the Departmental officers. Therefore, accordingly, the assessing officer appropriated the amount of Rs. 29,124 being the amount reversed of the wrongly availed of Modvat credit and also imposed a penalty of Rs. 2,000.

Dissatisfied with the order an appeal came to be preferred before the Commissioner of Customs and Central Excise (Appeals) who after observing that the earlier orders of the Customs, Excise and Gold (Control) Appellate Tribunal has already settled the controversy and accordingly, following the case of Black Diamond Beverages, the appeal was allowed. The contention of the respondent-assessee that Modvat credit on P. P. bags has rightly been taken by them since rule 57A allows Modvat credit on packing material, if the value of it has been included in the assessable value and that there is no allegation against them that the value of packing material was not included by them in the assessable value and this found favour with the Commissioner (Appeals) who as stated hereinabove allowed the appeal.

Dissatisfied with the order of Commissioner (Appeals), the Revenue preferred an appeal before the Tribunal who as aforesaid vide order dated May 1, 2000, dismissed the appeal of the Revenue. This order of the Tribunal has been assailed before us by the Revenue.

Mr. Ajay Shukla, counsel for the Revenue, submitted that there is perversity in the order of the Tribunal, he further submitted that earlier on pointing out by the Departmental officers, Modvat credit was reversed, and despite of the fact being in the knowledge of the respondent again the assessee tried to do the same which is impermissible, had the Departmental authority not investigated the said claim, it could have gone unnoticed and the assessee would have availed of input credit which was not available to it. He would further submit that substantial question of law arises out of the order of the Tribunal which needs consideration by this court.

We have considered the arguments advanced by the counsel for the Revenue and perused the impugned order. In our view, it is purely a finding of a fact and no question of law much less substantial question of law can be said to arise out of the order of the Tribunal. It is an admitted fact that the contention of the respondent-assessee is that Modvat credit on P. P. bags has rightly been taken by them since rule 57A allows Modvat credit on packing material, if the value of it has been included in the assessable value and there is no allegation against them that the value of packing material was not included by them in the assessable value.

In our view, both the Tribunal as well as the Commissioner (Appeals) have come to a definite finding of fact referred to hereinabove and in our view, the finding is based on appreciation of evidence, led by the assessee before the lower authorities and which has found favour by both the two appellate authorities concurrently and when there is concurrent finding of fact by the final fact-finding authority, namely, the Tribunal then, in our view, no question of law much less substantial question of law can be said to arise out of the order of the Tribunal. It is also a finding of fact that there was a bona fide claim on the part of the respondent as the said view was holding the field in the light of several rulings of the Tribunal, therefore, the assessee was also under the bona fide belief that the claim is correct. We notice that there is no perversity or illegality in the order of the Tribunal. Accordingly, this reference application being devoid of merit, is hereby dismissed.