TMI Blog2007 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... i) 02/2006(G) CE dated 13-1-2006 2. The respondents were originally a DTA Unit manufacturing Instant Coffee. They had Central Excise registration from 1994. In the year 1999, they opted to function as 100% EOU. At that time, they had balance of finished goods in packed as well as in loose condition. They also had certain packing materials. After becoming EOU, it is stated that the appellants did not cancel the Central Excise registration. They kept the Central Excise registration of the DTA Unit alive and cleared the goods, which were in stock at the time of conversion to EOU. During the period 9-4-1999 to 31-10-1999, while clearing the goods on payment of duty, they availed the Modvat credit available in their books and utilized the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in holding that the action of appellants in discharging duty from the Modvat credits balances available which were accrued during the regime of DTA unit is legal and there is no requirement of payment of duty under proviso to Section 3(1) of the Central Excise Act, 1944. (ii) The contention of the Commissioner (Appeals) that the action of appellants in discharging duty from the Modvat credit balances available, which were accrued during the regime of DTA unit is legal and there is no requirement of payment of duty under proviso to Section 3(1) of the Central Excise Act, 1944 is not sustainable. In terms of Board's Circular No. 77/99-Cus. dated 18-11-1999 "if the Modvat credit so availed of is lying in balance as unutilized on the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of availment of Modvat credit as per Rule 57F does not arise. The ruling of the Hon'ble Supreme Court in the case of Eicher Motors v. Union of India reported in 1999 (106) E.L.T. 3 (S.C.) cited in the order is not applicable to the present case i.e. 100% EOUs. (iv) The Commissioner (Appeals) held that the activity carried by the appellants in their 100% EOU is only packing and not repacking from bulk to retail packing. It is not the case that the retail packing emerges directly during the course of manufacture. The Totes/bulk cartons are in packed condition and converting it into retail packing is rightly called repacking. Presume that Commissioner (A)'s contention that it is only packing and not repacking, then the activity carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence from the appellant, has replied to them that in respect of the goods manufactured by them in their DTA Unit, before conversion into 100% EOU, and before its bonding, clarifying that the goods can be cleared in Domestic Market without permission from Development Commissioner, on payment of applicable duties after obtaining necessary clearance from the Central Excise authorities. This letter is dated 7-5-1999. It is also seen from the records that only with the knowledge and permission of the Revenue, the respondents had cleared the goods and the packing materials into the Domestic Area on payment of appropriate duty. However, the duty was discharged by payment from the Modvat account. Now the contention of the Revenue is that the Modva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Handbook of Procedures relating to the export oriented units. Para 9.4 reads as follows : Distinct Identity : "if an industrial enterprise is operating both as a domestic unit as well as an EOU/EPZ/EHTP/STP unit, it shall have two distinct identities with separate accounts. It is, however, not necessary for it to be a separate legal entity, but it should be possible to distinguish the imports and exports or supplies effected by the EOU/EPZ/EHTP/STP units from those made by the other units of the enterprise." The Commissioner (Appeals) has dealt with this provision and given a finding that the respondents have not committed any illegality in following the procedures. The entire activity of the respondents was within the knowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
