TMI Blog2015 (5) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act. The principle of law remains the same and can be applied in case of orders passed by the Settlement Commission under the Central Excise Act as well - appeal is bereft of any merit - Decided against Revenue. - Civil Appeal No. 2381 of 2005 - - - Dated:- 7-5-2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. For the Petitioner : Mr Yashank Adhyaru, Sr Adv., Mrs B Sunita Rani, Mr Ritesh Kumar, Ms Shweta Garg, Mr B Krishna Prasad, Advs. For the Respondents : Mr V Lakshmikumaran, Mr M P Devanath, Mr Vivek Sharma, Ms L Charanaya, Mr Aditya Bhattacharya, Mr R Ramachandran, Mr Hemant Bajaj, Mr Anandh K, Advs. JUDGMENT A K Sikri: The respondent herein is engaged in the manufacture of Toughened (Tempered) and Laminated Safety Glass for Automobiles falling under Chapter Heading 7004.10 and 7004.20 respectively of the First Schedule to the Central excise Tariff Act, 1985. For the manufacture of the glass of aforesaid nature, the respondent has been supplying float glass which is the main raw material of the respondent's product. On this the respondent has also been availing claim of modvat credit of duty paid on the aforesaid raw material, under Rule 57A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latent defect was found on a portion of the long sheet of glass and the said portion thereof had to be discarded it was not a case where the entire sheet of glass was not used as input as remaining part of the glass was in fact used. This contention of the respondent, however, was not accepted by the Settlement Commission resulting into passing of the orders in the manner stated above. Aggrieved by the aforesaid approach of the Settlement Commission, the respondent filed WP (C)No. 669/2002 in the High Court of Delhi, questioning the said approach as legally erroneous and challenging the order of he Settlement Commission on that ground. The High Court has accepted the plea of the respondent herein and after straightening the legal position the case is remanded back to the Settlement Commission to consider the matter afresh in the light of the legal principle mentioned by the High Court in the impugned judgment. In the instant appeal preferred by the Department against the aforesaid order, the main argument of the Department is that once the Settlement Commission had passed the orders under Section 32E of the Act, the High Court had no jurisdiction to tinker with the same, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: (i) The main raw material for the manufacture of the tempered and laminated glass in the applicant's factory is float glass which is an eligible input under Rule 57A of the Rules in this case. (ii) The defects noticed in the float glass (input) at the stage of inspection thereof after subjecting it to the process of cutting, marking, breaking off, grinding and washing are defects arising at the end of the suppliers of the said float glass and such defects have not been brought about during any of the processes to which the float glass is subjected to in the applicant's factory. (iii) The applicant filed a claim for such defective glass on the respective suppliers and the suppliers reimbursed the applicant for the cost of such defective glass. The cost reimbursed does not include the element of duty suffered on such float glass. (iv) The demand of duty made by Revenue is confined to the credit taken defective float glass for which the applicant has been reimbursed by the suppliers of such defective glass. The demand of duty does not include breakages or defects notice during the process of toughening, tempering on lamination. (v) Revenue have confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct on account of inherent defect in it. It is also to be noted that these defects are identified through a naked eye against a light source at the stage of the inspection and this could have been done even after the receipt of the goods in the factory of the applicant and before subjecting them to the various process of cutting, marking, breaking off, grinding etc. it is also not in dispute that the input float glass does not get rejected on account of any defects developed during any of the pre-processes to which it is subjected to. In view of this position, the reliance placed by the applicant on the following judgments of the Tribunal does not appear to be relevant. On that basis the High Court has concluded that the Commission committed an error by applying wrong principle in law, by treating even the float glass used for manufacture, that is, after the manufacturing process had commenced, to be a wasted input and came to an erroneous conclusion that the modvat could not be claimed in respect of that part of a particular float glass sheet. In forming this opinion the High Court relied upon the judgment of this Court in the case of Collector of Central excise vs. Rajastha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
