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TMI Blog2002 (5) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... e also in possession of R2 Registration Certificate No. RC2/92 issued by the Department. Initially they were having two separate Registration Certificate one for Sugar Unit and the other for Distillery Unit and they were also maintaining two separate PLAs for the two units. In the Distillery unit located near the factory area, alcohol both denatured and un-denatured are manufactured out of molasses. Verification of invoices revealed that prior to June, 1996 molasses were cleared without payment of duty for captive consumption in the Distillery Unit and the invoices were prepared by the Distillery on subsequent dates as a user industry which was not at all manufacturing molasses. They had prepared the invoices for the molasses already received by them from Sugar plant and captively consumed. Investigation also revealed that the invoices were prepared to represent the inputs received by them prior to 1996 without payment of duty. Therefore, these documents were invalid, according to the department, for the purpose of availing credit under Rule 57A. In the present case the duty amount mentioned in the Certificate A pertains to the duty paid by them for the consignment cleared by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the invoices in this case. Regarding the credit availed on the basis of Certificate 'A', to the tune of Rs. 7,09,087/- I find that they had relied on the provisions of Rule 57F(2). Rule 57F(2) allows credit of duty paid by the manufacturer of inputs subsequent to the clearances of inputs, any additional amount of duty consequent on the variation in price, rate of duty etc. In the present case the appellant did not pay the full amount of duty at the time of captive consumption of molasses but paid the entire amount of duty subsequently. Here the manufacturer sugar plant neither paid the duty on molasses at the time of diversion for captive consumption, nor paid any additional duty amount subsequently. But the entire duty was paid by distillery unit. So the order passed by the lower authority is correct regarding denial of credit of duty on Certificate 'A' also." It is against the above findings of the Commissioner (Appeals) that the appellants have come in appeal on the grounds that : (a) The Sugar Unit and the Distillery Unit cannot be treated as two separate units and these are in fact two divisions/wings of the same factory. The show cause notice has also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gments in the case of Dhampur Sugar Mills reported in 2001 (129) E.L.T. 73 (T)) = 2001 (43) RLT 299 (T) and Grauer and Weil (India) Vapi Ltd. v. CCE, Baroda reported in 1994 (78) E.L.T. 481 (S.C.), J.K. Synthetics Ltd. v. CCE reported in 1991 (52) E.L.T. 116 (T) . 4. Shri K. Mani, learned Consultant for the appellants reiterated the grounds of appeal and sought for setting aside the order in toto. 5.Shri V. Sounderarajan, learned JDR appearing for the department defended the orders passed by the authorities and also referred to the comments received from the Commissionerate vide letter C.Nol.V/ch. 17/2/34/98 appeals dated 13-10-2001 addressed to the SDR, a copy of which has been placed in the file. He submitted the appellants have taken Modvat credit on the invalid documents and hence and they are not eligible for the benefit and he sought for dismissal of the appeal of the appellants. 6.We have carefully considered the rival submissions. We find that the grievance of the department is that the appellants have taken Modvat credit on invalid documents and hence they are not eligible for the benefit of Modvat credit. We find that the following facts are undisputed : (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng input of the other unit and their removal from first unit shows 'as for' captive consumption having common power and water connections, common payments of these facilities, common payments to workers, common delivery challans and common stock register and store keeper, both the units treatable as one factory. Further, the Central Board has issued instructions vide F. No. 10/02/69-CX, dated 12-5-1971 according to which the different portions or sections or departments of the same factory are located in adjoining premises or premises merely separated by a road or a canal, railway and both the places are known as forming part of the same factory, it is not necessary for the premises to be licensed separately. In view of the above, in the present case the question that both the wings/divisions viz. the Sugar division and the Distillery wing of the same appellants have to be considered as one factory is answered in favour of the appellants. 8.Coming to the question as to whether the appellants can be held to have taken Modvat credit on invalid documents as held by both the authorities below, we observe that while the appellants have not strictly followed Rule 52A. There is no dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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