Commissioner of Central Excise, Goa vs Nestle India Ltd.

S.A. Bobde, J.—Heard learned Counsel for the parties.

A common question is involved in all these appeals. The question is whether; if, excise duty is levied on an assessee at place "A" and Modvat credit is sought to be availed of at place "B", it is open to the Authorities at place "B" to deny credit on the ground that no duty was payable at place "A".

We have accordingly re-framed question no. 4 at the time of admission of the appeals as above in all these cases. The common facts are that job works were undertaken at one place outside Goa and excise duty was paid on the goods before removing them from that place. These goods were brought to Goa and the factory owners sought to avail Modvat credit on the basis that the duty was already paid in the place outside Goa for the job work. This credit was sought to be denied by the Revenue on the ground that the job work did not attract payment of duty at all, and, therefore, the payment of duty outside Goa was of no consequence. Therefore, as a result the assessee cannot claim any credit in Goa.

Eventually, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), took a view that the point is covered by a decision of the CEGAT judgment in the case of 1998 (101) ELT 642 and therefore, dismissed the appeal filed by the Revenue.

Mr. Ferreira, learned Assistant Solicitor General for the appellant, submitted that the scheme of law is that if, excise duty is collected, a person at subsequent place is entitled to claim Modvat credit. According to Mr. Ferreira, learned Assistant Solicitor General, this can be so if, duty is validly collected at an earlier stage. In this case duty was not payable at all at the place outside Goa, since no duty can be levied on job work but only on manufacture and, therefore, the respondents are not entitled to claim any Modvat credit. Though this submission appears to be reasonable and in accordance with law, we find it not possible to entertain this submission in the facts of the present case since at no point of time the Revenue questioned the applicability of the excise duty at the place outside Goa. Those assessments have been allowed to became final and the goods have been removed from the jurisdiction of the Excise Officer at that place and brought to Goa. Now, in Goa it will not be permissible to allow the Revenue to raise the contention that the assessee in Goa cannot claim Modvat credit in Goa because duty need not be paid outside Goa.

As we have observed that the assessment is allowed to be final, it would not be legal and proper to allow the Revenue to raise the question on the basis of Modvat credit. Indeed, now the payment of excise duty must be treated as valid, therefore, the claim of Modvat credit must be treated as excise duty validly paid.

In this view of the matter, the appeals are dismissed. No order as to costs."