At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONOURABLE DR. CHITTARANJAN SATAPATHY
By, TECHNICAL MEMBER & THE HONOURABLE MR. P.K. DAS
By, JUDICIAL MEMBER
Shri K.N. Ravichandran, Adv. Shri C. Rangaraju, SDR
Per P.K. Das
The relevant facts of the case as per record in brief, are that the appellants were availing 100% Export Oriented Unit (EOU) facilities. They filed MODVAT declaration vide letter dated 27th September, 1999 claiming MODVAT credit on capital goods under Rule 57T of the erstwhile Central Excise Rules, 1944. The original authority held that the appellants are not eligible to MODVAT credit on capital goods under the said Rules, as Rule 57Q would not apply to the excisable goods produced or manufactured by a 100% EOU. The Commissioner (Appeals) upheld the adjudication order.
2. The learned advocate Shri Ravichandran on behalf of the appellants submits that they have filed declarations under Rule 57T of erstwhile Rules, which was not included in Rule 100-H(2) of the erstwhile Rules for non-applicability to a 100% EOU. He drew the attention of the Bench to the relevant provisions of the Rules. He relied upon the various decisions of the Tribunal, mainly in the case of GTN Exports Ltd. Vs Commissioner of Central Excise, Coimbatore [2009 (236) E.L.T. 110 (Tri.-Chennai)]. He also submits that Chapter V-A of the erstwhile Rules provides removal of excisable goods from a Free Trade Zone or from 100% EOU for home consumption. In this case, they have exported the goods and, the restriction of Chapter V-A would not apply herein.
3. The learned SDR Shri C. Rangaraju on behalf of the Revenue reiterates the findings of Commissioner (Appeals). He submits that the case of GTA Exports (supra) would not apply prior to the insertion of Notification No.18/2004-CE(NT) dated 06.09.2004.
4. After hearing both sides and on perusal of the records, we find that the appellant filed the MODVAT declaration vide letter dated 27.09.1999 under Rule 57T of the erstwhile Rules. Original authority observed that Rule 57R of the erstwhile Rules provides for the eligibility of credit of a manufacturer/supplier, who supplies exempted final products inter alia to a 100% EOU on capital goods. It does not refer to the eligibility of a 100% EOU. Commissioner (Appeals) has observed that EOUs are treated as special class and duty-free procurement is allowed under an exclusive notification with certain procedural requirements. It is seen that sub-rule (2) of Rule 100-H as it stood during the relevant period, provides that the provisions of Rule 57Q would not apply to excisable goods produced or manufactured by a 100% EOU. Rule 57Q of the erstwhile Rules is eligibility for MODVAT credit and Rule 57T is for filing of declaration. Rule 57R provides that no MODVAT credit shall be allowed on capital goods, which are used exclusively in the manufacture of exempted final products except the final product is removed to a 100% EOU. Thus, there is no provision for availing credit by 100% EOU. In the case of GTN Exports (supra) it was held that restriction of utilisation of credit by a 100% EOU was lifted by Notification No.18/2004-CE(NT)
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dated 06.09.2004 and CBEC Circular No.799/32/2004-Cx dated 23.09.2004. So the denial of credit to the appellants is justified. 5. In view of the above discussions, we do not find any reason to interfere with the order of the Commissioner (Appeals). Accordingly, the appeal filed by the appellants is dismissed.