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TMI Blog2013 (5) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... mere fact that the parts are cleared from one factory of the Appellants to another factory of the Appellants would not disentitle the Appellant from claiming benefit of Notification No. 217/86-C.E., dated 2nd April, 1986 which itself clarifies that the inputs can be used within the factory of production or in any other factory of the same manufacturer. By applying the ratio of Sterlite Industries (I) Limited vs. CCE, Pune [2004 (12) TMI 108 - CESTAT, MUMBAI] it becomes clear that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. E/3532/2005 filed by the revenue was rejected. Against order dated 18.02.2008 of CESTAT, Revenue approached the Hon'ble High Court of Gujarat in Tax Appeal No.1132/2009, on the ground that the decision of Gujarat Narmada Fertilizers Company Limited (supra) was further carried in appeal and the Apex Court in the decision reported in 2009 (240) ELT 661 (SC) has reversed the decision of the Hon'ble High Court of Gujarat. Taking note of these facts, Gujarat High Court allowed revenue's appeal, reversed the judgment of CESTAT and restored the order passed by Commissioner (Appeal). Hon'ble High Court vide its order dated 30.03.2012 reversed the order dated 18.02.2008 passed by CESTAT Ahmedabad and remanded back the proceedings to CESTAT for f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of the parts, which were cleared without payment of duty to, appellant's other unit under Chapter X procedure and utilised in the manufacture of tractor which were cleared on payment of duty by observing that since no duty was paid on the part at the time of clearance, Rule 57C will apply and no Modvat credit would be admissible. However, the said decision was subsequently reversed by the Supreme Court as reported in Escort v. C.C.Ex. [2004 (171) E.L.T. 145 (S.C.)]. For appreciation, we reproduce paragraphs 8 & 9 of the said decision. 8. It is to be seen that the whole purpose of the Notification and the Rules is to streamlines the process of payment of duty and to prevent the cascading effect if duty is levied both on the inputs and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Honourable Supreme Court, we would hold in favour of assessee.
The above Larger Bench judgment of CESTAT has been upheld by Hon'ble High Court of Bombay by their order dated 13.08.2008 as reported at 2009 (244) ELT A89 (Bom.). This Larger Bench judgment of Sterlite Industries (India) Limited (supra) was also followed by this Bench in the case of Welspun India Limited vs. CCE, Daman [2009 (248) ELT 898 (Tri. Ahmd.)] and Punjab & Haryana High Court in the case of CCE, Ludhiana vs. Jainsons Wool Coombers Limited [2011 (218) ELT) 360 (P&H)].
8. Respectfully following the settled law, the appeal filed by the assessee is allowed and appeal filed by Revenue is rejected.
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