1993 (11) TMI 64 - HC - Central Excise

Summary

Issues:
1. Classification of goods under Central Excise Tariff Act.
2. Denial of exemption under Notification No. 180/88.
3. Disputed Excise Duty demands.
4. Request for certificate of duty payment under Rule 57-E.
5. Interpretation of "payment" vs. "deposit" in the context of MODVAT credit eligibility.
6. Comparison with relevant case laws - Union of India v. Jain Spinners Limited and Super Cassettes Industries Ltd. v. Collector of Customs.
7. Dismissal of writ petitions seeking mandamus for certificate issuance.

Analysis:
1. The petitioner-company, engaged in manufacturing aluminum rough castings, faced a re-classification issue by the Revenue from exemption under Notification No. 180/88 to machinery parts under Chapter 87 of the Central Excise Tariff Act. This reclassification led to disputed demands for Excise Duty totaling Rs. 92,44,023. The company sought a certificate of duty payment to enable its buyers to claim MODVAT credit under Rule 57A of the Central Excise Rules, 1944.

2. The respondents contended that the deposits made by the petitioner as per the third respondent's order for stay pending appeals did not constitute payment of duty. They argued that issuing a certificate under Rule 57-E for MODVAT credit would complicate matters if the petitioner succeeded in their appeals and became eligible for a refund of the pre-deposit.

3. The petitioner's counsel argued that the deposits should be considered as duty paid, emphasizing the provisions of Rule 57-E for recoveries or adjustments. They relied on a Tribunal order for a similar case, but the court found the facts distinguishable. The petitioner's intention to claim MODVAT credit was challenged due to the nature of the deposits made.

4. The court examined the distinction between "payment" and "deposit," emphasizing the dictionary meaning of deposit as something entrusted for safekeeping. It concluded that the petitioner's deposits were made in compliance with the stay order, not as direct duty payments. The court referenced the Calcutta High Court judgment in Super Cassettes Industries Ltd. v. Collector of Customs to support the view that such deposits should not be treated as payment of duty.

5. Ultimately, the court dismissed the writ petitions seeking a mandamus for the issuance of a certificate of duty payment under Rule 57-E. It held that the deposits made by the petitioner did not qualify as duty payments, and therefore, the petitioner was not entitled to claim MODVAT credit for the deposits. The respondents were not obligated to issue the requested certificate.