2001 (3) TMI 1024 - AT - Central Excise

Summary

Issues:
Denial of modvat credit under Rule 57S(8) for sending Die to job worker without raw material, Interpretation of Rule 57S(8) requirements, Applicability of Supreme Court judgment on job worker definition, Comparison with Tribunal decision in similar case.

Analysis:
The judgment involves a case where the appellants, manufacturers of automobile Head Lamps, sent a Glass Plunger (Die) to a job worker without raw material and availed modvat credit. The issue arose when the modvat credit was denied under Rule 57S(8) by the authorities, citing a violation of provisions. The Dy. Commissioner imposed duty and penalties, which were upheld by the Commissioner (Appeals), except for a penalty of &8377; 50,000. The appellants filed an appeal against this decision.

Upon hearing the Stay Petition, the Judge observed that the denial of modvat credit was based on the requirement that raw material must also be sent to the job worker along with the moulds and dies, as per Rule 57S(8). The Judge noted the reliance on a Supreme Court judgment regarding the definition of a "job worker" and a Tribunal decision in a similar case where the appeal was allowed. The Judge highlighted that the power of granting permission under Rule 57S(8) was delegated to the Asst. Commissioner, and if supplying raw material was a condition, it should have been specified.

The Judge found the reliance on the Supreme Court judgment to be mis-conceived as it was not directly related to the provisions in question. Consequently, the appellants were deemed to have a prima facie case in their favor. The Judge granted waiver of the duty and penalty imposed, allowing a Stay against recovery until the appeal's final disposal. The appeal was scheduled for further hearing for final resolution.