1998 (9) TMI 275 - AT - Central Excise

Summary

Issues:
1. Change of title due to amalgamation of companies.
2. Reversal of Modvat credit on exempted products.
3. Interpretation of Rule 57H for transitional credit facility.
4. Reversal of credit on inputs for exempted final products.
5. Adjudication of pending application under Rule 57H.

Issue 1: Change of title due to amalgamation of companies
The appeal involved a request for a change in title from M/s. Brook Bond Lipton (I) Ltd. to M/s. Hindustan Lever Ltd. following an amalgamation as per High Court orders. The title change was granted accordingly to reflect the new entity.

Issue 2: Reversal of Modvat credit on exempted products
The respondents were manufacturing prepared food items falling under specific sub-headings and were availing Modvat credit. However, the products became exempt from duty under certain notifications. The jurisdictional authority asked for the reversal of Modvat credit, leading to a show-cause notice for the same. The Commissioner (Appeals) found that since the respondents had availed and utilized the credit properly as per rules, there was no basis to reverse the Modvat credit, overturning the Dy. Commissioner's order.

Issue 3: Interpretation of Rule 57H for transitional credit facility
The respondents had applied for transitional credit under Rule 57H, which was partially allowed with some part still pending. The Dy. Commissioner considered the application independent of the duty liability, but the Commissioner (Appeals) emphasized that the respondents acted in compliance with the law in availing credits. The Tribunal upheld the Commissioner's decision, highlighting the proper utilization of credits by the respondents.

Issue 4: Reversal of credit on inputs for exempted final products
The Department argued for the reversal of credit on inputs for finished products that became exempted. Citing a judgment, the Department contended that such credit must be reversed. However, the respondents referred to a Tribunal judgment and expressed willingness for the Department's appeal to direct the Dy. Commissioner to decide on the pending application under Rule 57H before enforcing the demand.

Issue 5: Adjudication of pending application under Rule 57H
The appeal's prayer was focused on adjusting the demand against the transitional credit claimed by the respondents in their Rule 57H application. The Tribunal acknowledged the need for adjustment and disposed of the appeal in favor of the respondents, emphasizing the importance of justice by acceding to the prayer for adjusting the demand against the transitional credit claimed.