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TMI Blog2013 (9) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... utshell, are as under: The appellant-assessee is a manufacturer of machinery for sugar and cement plants and parts thereof falling under Chapter 84 of the Central Excise Act, 1944. The appellant not only sets up sugar and cement manufacturing plant as per the specifications of the clients in India but also sets up such plants in foreign countries and here we are concerned with a plant which was set up in Vietnam. 3. The appellant-assessee entered into a contract with M/s Vina Sugars, Vietnam for supply and installation of a sugar plant at Vietnam with a capacity of 1250 TCD (Tons crushed per day). For the said purpose, the appellant had manufactured certain machines in its own factory which were to form part of the sugar plant and certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to manufacture of the final product manufactured by the appellant. 6. For the afore-stated reasons, show cause notices dated 29.03.1996 and 03.03.1997 were issued to the appellant, which had been dropped on considering the reply of the appellant. Upon review of the orders whereby the show cause notices had been dropped, the Central Board of Excise and Customs directed the Commissioner to file an appeal before the CEGAT and therefore, the Commissioner filed the appeals. 7. It was mainly submitted in the appeals on behalf of the department that the goods in respect of which the MODVAT credit was availed by the appellant, were not capital goods as per the provisions of Rule 57Q of the Rules. It was also submitted that such goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'inputs' as the said parts had not been used by the appellant in the process of manufacturing the machinery. The appeals were heard by the CEGAT and ultimately the CEGAT allowed the appeals by remanding the cases to the original authority for computing and confirming the amount of the MODVAT credit irregularly availed by the appellant and also for imposition of appropriate penalty after affording effective opportunity of hearing to the appellant in accordance with law. 10. Being aggrieved by the afore-stated orders passed by the CEGAT in Final Order Nos. 301 & 302 of 2003, the present appeals have been filed by the appellant. 11. The learned senior counsel appearing for the appellant had submitted that the impugned orders passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery which had been purchased by the appellant from other manufacturers or dealers and which had been transported to Vietnam by sea was part of the inputs. In the circumstance, without considering whether the plant set up in Vietnam was movable or immovable, the respondent authorities ought to have given the benefit of the MODVAT credit to the appellant. 16. According to the learned counsel for the appellant, the whole sugar machinery was cleared from the factory in unassembled or dis-assembled condition. In view thereof, it was not open to the respondent Authorities to contend that parts of machinery which had been purchased by the appellant from other manufacturers would not form part of the inputs. 17. To substantiate his submissions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of grant of any relief because in that case there would not be any cascading effect on the duty imposed. 22. Looking at the above stated clear legal position, one may see here that no duty was paid by the appellant on the final product i.e. on the sugar plant which had been set up in Vietnam. For time being, let us forget the fact whether the plant is movable or immovable - the fact remains that no duty was paid on the said plant and therefore, there would not be any question with regard to getting credit on the duty paid on the inputs, especially when the appellant had not used the machinery manufactured by other manufacturers in its factory premises while manufacturing machinery which had been transported along with machinery manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been complied with. To avail the MODVAT credit, the input on which excise duty is paid must be used in the manufacture of the final product in the factory of the assessee. The machinery purchased by the appellant had not even been tested or was not even unwrapped in the factory of the appellant. In case of such an admitted fact, it cannot be said that the machinery so purchased from others was used by the appellant in the manufacture of the sugar plant. 25. In the instant case, the appellant had only acted as a trader or as an exporter in relation to the machinery purchased by it, which had been exported and used for setting up a sugar plant in a foreign country. In any case, it cannot be said to have manufactured that plant in its factor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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