2003 (2) TMI 393 - Commissioner - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit availed by the assessee.
2. Validity of declarations filed by M/s. Borachem Industries Pvt. Ltd.
3. Transfer of business from M/s. Borachem Industries to M/s. Biostar Pharmaceuticals.

Analysis:

1. The issue at hand is the admissibility of Modvat credit availed by the assessee, M/s. Biostar Pharmaceuticals Pvt. Ltd. The Assistant Collector alleged that Modvat credit of Rs. 6,28,651/- was wrongly availed during a specific period. The Additional Collector confirmed a demand of Rs. 1,47,725/- and imposed a penalty of Rs. 14,000/-, which was later reduced by the Commissioner (Appeals) to Rs. 9,000/-. The CEGAT remanded the case for readjudication, focusing on the declarations filed under Rule 57G.

2. The validity of declarations filed by M/s. Borachem Industries Pvt. Ltd. was a crucial aspect. The CEGAT noted that M/s. Biostar Pharmaceuticals had taken over M/s. Borachem Industries and produced declarations filed by the latter. The question arose whether these declarations could be accepted for granting Modvat credit. The Commissioner found the declarations genuine, considering the transfer of business and adherence to Excise procedures. The declarations were filed before the takeover, entitling the assessee to the Modvat credit.

3. The transfer of business from M/s. Borachem Industries to M/s. Biostar Pharmaceuticals played a significant role in the judgment. The Commissioner acknowledged the transfer and the continuity in manufacturing activities. The original declarations filed by M/s. Borachem Industries were accepted, as they were genuine and filed within the prescribed period. Consequently, the case proceeding against M/s. Biostar Pharmaceuticals Pvt. Ltd. was dropped based on the findings regarding the validity of declarations and the transfer of business.

In conclusion, the judgment revolved around the admissibility of Modvat credit, the validity of declarations filed by the previous company, and the transfer of business to the current assessee. The Commissioner's decision to drop the case was based on the genuine nature of declarations, adherence to procedural requirements, and the continuity in manufacturing activities following the business transfer.