2002 (7) TMI 204 - AT - Central Excise

Summary

Issues Involved: Appeal against order-in-appeal, remand of case, transfer of Modvat credit, interpretation of Rule 57F of Central Excise Rules, 1944.

Appeal Against Order-in-Appeal:
The appeal was made against the order-in-appeal dated 20-11-2001 passed by the Commissioner (Appeals), New Delhi. The appellants argued that the original Adjudicating Authority had passed the order without giving them a hearing, and the Commissioner (Appeals) refused to remand the case back for de novo proceedings, citing recent amendments in the Central Excise Act, 1944.

Remand of Case:
The learned DR for the Revenue stated that there is no bar to the Tribunal remanding the case back to the original Adjudicating Authority for a fresh decision. However, he contended on merit that under sub-rule (21) of Rule 57F of the Central Excise Rules, 1944, the credit shall be allowed only if the stock of inputs as such or in process is also transferred.

Transfer of Modvat Credit:
The Assistant Commissioner did not provide a hearing to the appellants or pass a regular order of adjudication. He communicated that there was nil balance in certain registers and since no inputs were transferred to the new site, the Modvat credit balance cannot be transferred. The Tribunal found a clear lapse on the part of the Assistant Commissioner but decided not to remand the case back to him as the Commissioner (Appeals) had already considered and rejected the claim.

Interpretation of Rule 57F:
Sub-rule (21) of Rule 57F requires the transfer of Modvat credit only if the stock of inputs, including those in process, is also transferred. While ensuring that no double benefit is given to the assessee, this rule cannot be extended to deny transfer of credit when there is physically no stock of inputs at the old premises. The Tribunal held that in this case, as there were no stock of inputs at the old premises, the appellants were entitled to transfer the credit. The appeal was allowed.