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TMI Blog2009 (11) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... infirmity in the impugned order. - E/5113/2004 - 1257/2009-EX(PB), - Dated:- 30-11-2009 - Justice R.M.S. Khandeparkar, President and Shri Rakesh Kumar, Member (T) REPRESENTED BY: Shri R.K. Hasija, Advocate, for the Appellant. Shri M.K. Rastogi, DR, for the Respondent. [Order per: Rakesh Kumar, Member (T)]. - The facts leading to this appeal are, in brief, as under :- 1.1 The appellants in their plant located at Mordi, Banaswara, manufacture processed manmade fabrics of Chapters 52, 54, 55 and 60 and dyed yarn of Chapters 54 and 55 of the Central Excise Tariff. They took over the entire premises including plant and machinery, from M/s. Purvi Fabrics Texturisers Pvt. Ltd. (hereinafter referred as M/s. Purvi) w.e.f. 1-8-99. The machinery taken over including three yarn dyeing machines, had been purchased by the previous owner- M/s. Purvi in the year 1998, in respect of which capital goods Modvat credit under Rule 57Q of the Central Excise Rules, 1944 had been taken and entire capital goods credit including that in respect of the Dyeing machines, had been utilized by M/s. Purvi prior to 1-8-99. The appellant filed a classification declaration No. 6/77-2000 effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued for denying the exemption and demand of allegedly short paid duty amounting to Rs. 5,72,527/- and also for imposition of penalty under Rule 173Q(1). The Joint Commissioner vide order in original dated 3-10-2001 confirmed the duty demand and also imposed penalty of Rs. 25000/- under Rule 173Q(1) on the ground that the exemption had been wrongly availed as duty credit under Rule 57Q had been availed in respect of dyeing machinery. 1.3 On appeal, the Commissioner (Appeals) vide order in Appeal No. 388/04 dated 22-6-04 upheld the duty demand, but set aside the penalty. It is against this order of CCE (Appeals) that the present appeal has been filed. 2. Heard both the sides. 2.1 Shri R.K. Hasija, Advocate, the ld. Counsel for the Appellant, made the following submissions. (1) The capital goods, in question, had been purchased by M/s. Purvi from whom the appellant took over the plant Machinery. The capital goods credit taken by M/s. Purvi had been utilized and consumed before the sale of plant and machinery to the appellant. The appellant neither inherited any capital goods credit from M/s. Purvi, nor availed any capital goods duty credit. Since other conditions of the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercerized yarn, and since capital goods duty credit in respect of dyeing plants machinery had been taken by M/s. Purvi, the condition for availing concessional rate of duty under this notification has not been fulfilled; (ii) W.e.f. 1-4-2000, the rule pertaining to Modvat credit in Central Excise Rules, 1944, had been re-arranged and re-numbered and the condition for availing the exemption had not changed, the Rule 57AB or 57AK have to be read with the old Rules 57A or 5713 or 57Qj and (iii) this is not a case where the earlier owner M/s. Purvi, while handing over the plant and machinery to the appellant had paid any duty on the capital goods in respect of which duty credit had been availed under Rule 57Q and therefore the machinery for dyeing in the appellant's plant have to be treated as the machinery in respect of which capital goods Modvat credit had been taken under Rule 57Q. 3. We have carefully considered the submission from both the sides and perused the record. The appellant manufacture processed and man made fabrics of Chapters 52, 54, 55 and 60 and dyed yarn of Chapters 54 55 of the tariff. They had taken over the plant and machinery from its previous owner M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached or mercerized yarn. W.e.f. 1-4-2000 by amending Notification No. 29/2000-C.E., dated 31-3-2000 words, figures and letters - "Rule 57A, Rule 57B and 57Q in the condition No. 21 and 22 were replaced by the words, figures and letter - Rule 57AB and Rule 57AK". 6. First contention of the appellant is that it is previous owners M/s. Purvi who had availed the capital goods duty credit under Rule 57Q in respect of dyeing plants Machinery and the appellant have neither inherited any credit nor have availed any fresh credit. From the language of the conditions No. 21 and 22 it is clear that what is required for concessional rate of duty is that no credit under Rule 57A or 57B or 57Q of Central Excise Rules, 1944 has been availed, in the process of dyeing, printing, bleaching or mercerizing in the manufacture of dyed, printed, bleached or mercerized yam. This is a case where the plant and machinery including the dyeing plant and machinery had been taken over by the appellant from its previous owner M/s. Purvi and M Purvi had taken capital goods modvat credit in respect of dyeing machinery and had fully utilized the same prior to the taking over of the plant by the appellant. It is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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