2006 (5) TMI 49 - SC - Central Excise

Tribunal accepted the assessee s appeal by allowing exemption U/Not 5/98 holding that credit has not been availed on any other good mfd. in same factory SC deicide that tribunal has not recorded any clear cut finding on the paint raised by the Revenue so appeal is allowed by way of remand.

Summary

Issues:
1. Interpretation of exemption notification under Section 35L(b) of the Central Excise Act, 1944.
2. Availing of credit of duty under Rule 57-A or 57-B on products manufactured in the same factory.
3. Tribunal's finding on the denial of exemption under notification No. 5/98-CE.

Analysis:
1. The case involved a Statutory Appeal filed 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 denied exemption under Notification No. 5/98-CE due to alleged availing of MODVAT credit on inputs used in manufacturing final products. The Tribunal set aside the order-in-original, holding that the assessee was entitled to the exemption under the notification.

2. The exemption under the notification was subject to the condition that the manufacturer does not avail of credit of duty on specific products or on any other products manufactured in the same factory. The dispute arose as the respondent had not availed of credit on the specified products but had utilized MODVAT credit on inputs used for manufacturing other final products. The Tribunal's decision was based on the absence of evidence that the respondent availed credit on any other product manufactured in the same factory, leading to the benefit of the notification being granted.

3. The counsel for the revenue argued that the Tribunal's finding was contrary to the record and submissions made. The respondent contended that the credit taken on products manufactured in the same factory had been offset by paying the applicable duty on finished goods. However, as the Tribunal did not provide a clear finding on this matter, the Supreme Court accepted the appeals, set aside the Tribunal's orders, and remitted the cases for a fresh decision. The parties were allowed to present all contentions except the limitation issue, with each party bearing their own costs.

This detailed analysis outlines the key legal issues, the interpretation of the exemption notification, the availing of duty credit, and the Tribunal's decision, leading to the Supreme Court's judgment to remit the cases for a fresh decision.