2006 (5) TMI 549 - SC - Central Excise

Summary

Issues:
Exemption under Notification No. 5/98-CE for duty payment on specific goods under certain conditions.

Analysis:
The case involved an appeal under Section 35L(b) of the Central Excise Act, 1944 against an order passed by the Customs, Excise, and Gold (Control) Appellate Tribunal. The respondent, a manufacturer of various products falling under different headings, was granted exemption from duty payment under Notification No. 5/98-CE, subject to specific conditions. The main issue revolved around whether the respondent had availed of the credit of duty on specific products as mentioned in the notification. The Show Cause Notice alleged that the respondent had been availing of the MODVAT facility for both exempted and dutiable goods from the same factory premises, which was in contravention of the conditions of the exemption notification.

The Tribunal, in its impugned order, held in favor of the respondent, stating that they were entitled to the exemption from duty payment under the notification. The Tribunal emphasized that the exemption was subject to the conditions specified in the notification, particularly condition No. 10, which prohibited the manufacturer from availing of duty credit on specific products or any other products manufactured in the same factory. The Tribunal found that since it was not proven that the respondent had availed of duty credit on any other product manufactured in the same factory, the benefit of the notification could not be denied.

However, the revenue contended that the Tribunal's finding was contrary to the evidence and submissions made. The respondent argued that any duty credit taken on other products manufactured in the same factory had been offset by payment of applicable/full duty on the finished goods. Due to the lack of a clear finding by the Tribunal on this point, the Supreme Court allowed the appeals, set aside the Tribunal's orders, and remitted the cases back for a fresh decision. The Court clarified that all contentions, except the finding on the question of limitation, would be open for reconsideration by the respective Tribunal. The parties were directed to bear their own costs in the matter.