ORDER
S.L. Peeran, Member (J)
1. For the purpose of hearing this appeal, appellants are required to pre-deposit Rs. 44,19,148/- confirmed in terms of impugned orders. The short facts of the case are that appellants were issued with four show cause notices by the Superintendent of Central Excise, National Park Range, Bangalore for contravention of provision of Rule 57GG/57G in as much as they had received the input goods on stock transfer basis for conversion from M/s. Indian Iron and Steel Company Ltd., M/s. TISCO, M/s. VSP and not being a regular sale as required under Rule 57G as amended by Notfn. No. 14/95-CE(NT) dt. 24.4.1995. Therefore, it was alleged that the modvat credit availed by the appellants on such inputs where there was no sale was irregular as per provisions of Rule 57G/57GG. The stand taken by deptt. was resisted by appellants on the ground that sale is not essential for the purpose of utilising the modvat credit. They also submitted that when job worker sells the goods on behalf of M/s. IISCO, TISCO and VSP which is the resultant of the conversion as done by the re-rollers which is relevant case in themselves, the only document that could be issued most for the purpose of transport of inputs as well as for the purpose of modvat is the invoice prescribed under Rule 57G. They further contended that in similar cases, there was outright purchase and in some other cases the inputs are received on stock transfer basis or on account conversion and therefore same is required to be accepted.
2. However, this was not accepted and demands were confirmed. The Commissioner (Appeals) also rejected their pleas.
3. Ld. Advocate submits that the Board vide their Circular No. 267/63/97-CX dt. 9.9.1997 has clarified that the definition of “sale and purchase” under Section 2(h) of the Central Excise Act, 1944 means transfer of possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Hence, it was clarified that the transaction between depot of SAIL and their conversion agents falls within the definition of sale as given under Central Excise Act, 1944. Therefore, it was clarified that modvat credit on duty paid semies/billets will be available on the invoices issued by the depot of SAIL to their conversion agents under Rule 57G of C.E. Rules. It was also clarified that the term “sale” as appearing in the said rule qualifies only the word other premises and will not apply to the depot/consignment agents, as the case may be.
4. Ld. advocate submits that on this issue at the stay stage itself, the appeal of BPL was remanded for de novo consideration by final order No. 1611 & 1612/99 dt. 2.7.1999 and in another case same view was taken in their matter by final order No. 1292/99 dt. 17.8.1999. He points out that the Tribunal remanded the case on the ground that the authorities should reconsider the case and also ascertain the duty paying nature of the inputs alone for grant of modvat credit. He submits that this issue being lying within four corners of these two citations, he seeks for grant of waiver of pre-deposit and stay of recovery.
5. Ld. advocate further prays that they could not place the Board’s letter referred to above and therefore the matter could be remanded as had been done in BPL’s case above for de novo consideration in the light of Board’s letter now placed before the Bench.
6. Heard Ld. DR who reiterates the departmental view as taken in the impugned orders.
7. On a careful consideration of the submissions, we notice that in the case of BPL as noted above, the matter was remanded for de novo consideration taking into consideration the previous orders of the Tribunal as rendered in CCE v. Modern Food Industries (India) Ltd. as and another order in final order No. 2293 & 2294/97 dt. 2.9.1997 wherein it was observed in para 6 as follows:
6. We observe that the appellants are a multi unit organisation and for the manufacture of certain goods, certain components are manufactured in one unit which are utilised in the other unit. These components, had suffered duty in the unit from where these were transferred on stock transfer. In such a situation therefore, the matter will have to be examined as to whether in terms of Section 2(h) the sale by reason of book transfer has been effected or not. This fact would be required to be gone into and in case this is so, the appellant in terms of the order of the tribunal will be entitled the benefit of modvat credit. We, therefore, set aside the order of the learned lower authority and remand the matter to the original authority for de novo consideration and decision in the light of our observations after affording an opportunity of hearing to the appellants to adduce the evidence as required in the facts of this case.
8. In terms of the above ratio, the appeal in respect of BPL case had been remanded for de novo consideration by final order No. 1611 & 1612/99 dt. 2.7.1999. Further, we notice that in the present case, Ld. consultant has brought to our notice the Board’s letter dt. 2.9.1997 as noted above wherein the Board has clarified the issue in the light of the Judgment rendered in M/s. RB fodha Mal Industries Pvt. Ltd., Jamntu & Kashmir vide final order dt. 29.5.1997 in Civil Writ Petition No. 866/96 by the Hon’ble Jammu and Kashmir High Court. The authorities below did not have the benefit of this Board’s letter dt. 2.9.1997 and the tribunal judgement. Therefore, the prayer made by the Ld. Advocate is required to be accepted. Hence the stay application is allowed. Waiver of pre-deposit and stay of recovery is granted. As the Tribunal in similar matters has remanded the matter for de novo consideration, we deem it proper that the impugned order is set aside and remand the matter to original authority for de novo consideration in the light of Board’s letter as noted above and the judgements referred to above. Ordered accordingly. The appellants shall be heard in person by the original authority before taking a final decision in the matter during de, novo proceedings.
(Pronounced & dictated in open court).
