2001(03)LCX0158
BEFORE THE COMMR. OF C. EX. (APPEALS), CHENNAI
IN RE : VISTEON AUTOMOTIVE SYSTEMS INDIA P. LTD.
Order-in-Appeal No. 42/2001 (M-III), dated 14-3-2001
Advocated By : Shri R. Muralidharan, Cost Accountant, for the Appellant.
[Order]. - This is an appeal filed by M/s. Visteon Automotive Systems India (P) Ltd., against the above-mentioned order passed by the Assistant Commissioner of Central Excise, Chinglepet Division of Chennai-III Commissionerate wherein she disallowed Modvat credit of Rs. 16,90,269/- under Rule 57-I and imposed penalty of Rs. 1000/- under Rule 173Q.
2. The brief facts of the case are as under :-
The appellant company is engaged in the manufacture of parts of Motor Vehicles falling under CSH 8708.90 and availing Modvat facility under Rule 57A/Q. During the course verification of records it was observed that the appellant had taken Modvat credit under Rule 57Q on eligible capital goods to the tune of Rs. 19,74,546/-. Hence a show cause notice dated 11-2-2000 was issued by the Range Officer to deny the credit. After due process of law, the lower authority passed the impugned order.
3. Aggrieved over this order, the appellant company preferred an appeal before this forum. In the grounds of appeal, they mainly contended that the impugned goods are eligible to credit under Rule 57Q(3); that this such rule starts with non obstante clause; that in view of above clause restrictions imposed under sub-rule (1) of Rule 57(Q) do not come into play in respect of credit availed on project input goods; without prejudice to the above argument the impugned goods mentioned in the show cause notice would be more appropriately classifiable under CSH 8419.00 and hence eligible for credit and finally pleaded to set aside the impugned order.
4. The matter was posted for hearing on 7-3-2001. Shri R. Muralidharan learned Cost Accountant appeared before me on behalf of the appellant company and reiterated the grounds of appeal. He also filed a written submission and the copies of the case laws relied upon by him.
5. I have given my careful consideration to all the facts of the case. I perused the impugned order grounds appeal and the case records.
6. The short question that arises for my consideration is in the given facts and circumstances of the case whether the capital goods imported order project import under CSH 98.01 are eligible for Modvat credit or not.
7. From the records I observe that the Show cause notice was issued for 4 items of which the appellant had reversed the credit in respect of Sl. No. 1 of the show cause notice and is not contesting the same. Hence my scope of consideration narrows down to Sl. Nos. 2 to 4 of the show cause notice. On perusal of the relevant Bills of entry, I observe that the said goods mentioned in Sl. Nos. 2 to 4 have been imported under project import and the relevant classifiable mentioned as CSH 9801.00. The learned Cost Accountant argued that as per Rule 57Q(3) they are eligible for Modvat credit. For sake easy understanding let me reproduce the relevant portion of the Rule.
“57Q(3). - Notwithstanding anything contained in sub-rule (1), the manufacturer of the final products shall be allowed credit of additional duty leviable under section 3 of Customs Tariff Act, 1975 (51 of 1975) on goods falling under chapter heading No. 98.01 of the First Schedule to the said Customs Tariff Act, to the extent of 75% of the said additional duty paid on such goods”.
8. From the plain reading of the above Rule I come to the conclusion that any goods - whether it is specified under sub-rule (1) or not when imported as project import and classified under CSH 98.01 of Customs Tariff Act the same is eligible for 75% of CVD paid as Modvat credit under Rule 57Q. It is not necessary to go in classification of each and every product imported under the project import.
9. Since in the instant case the goods mentioned in Sl. Nos. 2 to 4 of the show cause notice have been imported under project import and CVD has been paid under CSH 9801.00 in the relevant Bills of entry, I hold the view that the same are eligible for Modvat credit under Rule 57Q(3). I direct the lower authority to extend the Modvat credit after verification I vacate the penalty imposed under Rule 173Q.
10. In the light of the above discussions, the impugned order is set aside and the appeal is allowed.
Equivalent 2001 (131) ELT 0527 (Commr. Appl.)