AUTOLEC INDUSTRIES LTD Vs. COLLECTOR OF C. EX.
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
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V.P. Gulati, Member (T) -
(1.) THIS appeal is against the order of the Collector of Central Excise (Appeals), Madras. The appellants have been penalised for having brought in goods on which duty had been paid by another unit of the appellants.
(2.) THE learned Advocate for the appellants pleads that the goods brought into the appellants' factory were different from those which were manufactured in the factory. He has pleaded that as it is various duty paid goods are brought into the factory either as inputs or for use in the factory including furniture, fittings etc. and at no time the Central Excise authorities have ever insisted that such goods should not be brought into the factory. He has pleaded that Rule 51A should be read realistically to effectuate its purpose but not to deny any legitimate business activities of the appellants. In this connection he drew my attention to Rule 51A, which reads as under :
"51A. Removal of goods after payment of duty. - Except as otherwise expressly provided in these Rules, no duty -paid goods shall be allowed to enter, or be retained in, any part or premises of a factory :
Provided that the Collector or the Board may, by a general or special order, and subject to such conditions and limitations as may be laid down in such order, permit duty paid goods to enter, or to be retained in, any part or premises of a factory."
He has pleaded that since the goods brought into the factory were different from those being manufactured in the factory no objection can be taken to their entering the appellants factory and the levy of penalty, therefore, is not warranted.
(3.) HEARD Shri Vedantham, the learned DR. He has pleaded that the rule should be read literally and, therefore, the entry of any duty -paid goods into the factory is against the provisions of law.
I observe that no doubt under the rule no duty -paid goods are allowed to enter the premises of the factory. But if we have to read the rule literally it would mean that any duty -paid goods which may be in the nature of inputs or for use in the factory cannot be allowed to enter the factory premises without the permission of the Collector. This will be putting a restriction, which would render the working of the factory impossible. Rule 51A figures under Chapter V, which deals with the manufactured goods other than salt. Under this Chapter the various rules and provisions deal with the various declarations to be made by the manufacturer in respect of the goods for which the appellants have been issued a licence, storing of the goods manufactured as under Rule 47, clearance of the goods as provided for under Rule 49 on payment of duty, clearance of the goods on payment of duty as provided under Rule 52, issue of Gate passes in respect of the said goods, filing of monthly returns in respect of the goods manufactured, and Rule 56A which deals with proforma credit in respect of the inputs received for the manufacture of finished goods as also the provisions regarding Modvat credit. All these go to show that the Rules in this Chapter deal with the goods which are manufactured by a particular manufacturer. Restriction in this context under Rule 51A could be said to be only with reference to the goods which have been manufactured by the particular manufacturer and which have been cleared from the factory on payment of duty. We cannot, therefore, by reading the rule conclude that there is a ban on the receipt of goods other than those manufactured in the factory. In this view of the matter I hold, therefore, that the appellants' plea has to be allowed and the learned lower appellate authority's order is, therefore, set aside with consequential relief. The appeal is thus allowed.;
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