TMI Blog2012 (7) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... unit into an 100% E.O.U.unit - case is remanded back to the Commissioner for de novo adjudication after verifying the facts with the Ministry of Commerce & Industry about the conversion of D.T.A. unit into an 100% E.O.U - appeals are allowed by way of remand. - E/1267 to 1270/03 & E/CO.224/03-Mum - - - Dated:- 9-1-2012 - Mr S.S.Kang, Mr.Sahab Singh, JJ. Shri Naresh Thacker, Advocate with Shri P.Contractor, Advocate for Appellants Shri V.K.Agarwal, Addl.Commissioner(A.R.) for Respondent Per : Sahab Singh Sterlite Optical Technologies Ltd. ( hereinafter referred to as the appellants) are engaged in the manufacture of optic fibers and optic fiber cables falling under Chapter 90 and 85 respectively of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% EOU at plot E-3. As the appellants started the operation in 100% EOU with effect from 14.3.2001 at plot E-3, they procured certain capital goods on payment of duty in the name of their DTA unit prior to 14.3.2001 though those goods were actually required for operation of 100% EOU and the appellants have availed the Cenvat credit on those capital goods which were received in the DTA unit till the date of commencement and operation of 100% EOU on 14.3.2001. Subsequently, after 14.3.2001, these capital goods were transferred to 100% EOU without reversing the Cenvat credit availed on the same by the appellants in their DTA Unit. 4. Further, after 14.3.2001, the capital goods procured by the appellants for their 100% EOU were directly recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory and as such there was no occasion either for the payment of duty on such goods or for reversal of Cenvat credit. The liability to duty on the capital goods arises only if they are removed from their factory. In the present case, the capital goods on which the Cenvat credit was disallowed were installed in plot E-3 and after the receipt of the capital goods, the said plot E-3 was accorded the status of 100% EOU. He further contended that the demand of duty of Rs. 64,55,802/- is also unsustainable in view of the Board s Circular No.77/99 dated 18.11.1999 which clearly stated that if a D.T.A. had availed of Modvat credit on capital goods and it also utilized credit for payment of duty on goods manufactured and cleared by it before convers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. He stated that as a bona fide manufacturer they have voluntarily paid the duty amounting to Rs.89.55 lakhs in respect of the Cemvat credit availed on the capital goods which was not eligible to them. He, therefore, requested that the appeals may kindly be allowed. 7. The Addl.Commissioner (A.R.) on behalf of the Revenue reiterated the findings of the original adjudicating authority and submitted that these are two different units and having different licences and transfer of the capital goods have taken place by way of issue of Debit Notes between the two units. He further submitted that in their application to the Ministry of Commerce Industry, they have submitted an application for setting up of a new unit at plot E-3. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same is not required to be demanded on its conversion into EOU/EHTP/STP. However, if the Modvat credit so availed of its lying in balance as unutilized on the date of conversion into EOU/EHTP/STP, it would lapse on conversion of D.T.A. unit into EOU/EHTP/STP unit and cannot be utilized after such conversion. 9. The appellants submission is that since their D.T.A, unit had been converted into an 100% E.O.U. vide letter dated 27.2.2001 issued by the Ministry of Commerce Industry, they are eligible for the benefit of Board s Circular No.77/99 and as such no duty is required to be paid by them. On the other hand, the Revenue contends that their application to the Ministry of Commerce industry was for setting up a new unit and not for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants and the Ministry of Commerce Industry between the period 31.01.01 and 27.2.2001. It is also not clear whether the Department has taken up the matter with the Ministry of Commerce industry for clarification and confirmation about the conversion of existing D.T.A. unit into an 100% E.O.U unit. The entire case depends on the fact whether the Ministry of Commerce Industry has permitted the appellants to convert the existing D.T.A. unit into an 100% E.O.U.unit. In the interest of justice, the case is remanded back to the Commissioner for de novo adjudication after verifying the facts with the Ministry of Commerce Industry about the conversion of D.T.A. unit into an 100% E.O.U, after affording an opportunity of being heard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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