IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.105 OF 2006 CENTRAL EXCISE APPEAL NO.105 OF 2006 CENTRAL EXCISE APPEAL NO.105 OF 2006 Commissioner of Central Excise ..Appellant. V/s. M/s.PRS Permacel P.Ltd. ..Respondents. Mr.K.R.Chaudhary with R.C.Master for appellant. Mr.D.B.Shroff with Prem Ranga for respondents. CORAM : H.L.GOKHALE AND CORAM : H.L.GOKHALE AND CORAM : H.L.GOKHALE AND J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 9TH NOVEMBER, 2006. DATED : 9TH NOVEMBER, 2006. DATED : 9TH NOVEMBER, 2006. P.C. :- P.C. :- P.C. :- Heard Mr.Chaudhary in support of this appeal. Mr.Shroff appears for the respondents. Appeal seeks to challenge the order passed by the Central Excise and Service Appellate Tribunal, Mumbai dated 12th August, 2005 whereby the Tribunal has allowed the appeal filed by the respondents. 2. Respondents are manufacturing self- adhesive tapes and labels and amongst others, it used plastic as an input. It is the case of the respondents that some of the finished stocks manufactured by the respondents were unfit for marketing and, therefore, they applied for destruction of the goods and remission of duty in respect thereof under Rule 21 of the Central Excise Rules, 2001. That application dated 12th December, 2001 came to be granted by the Deputy Commissioner of the Central Excise on 11th May, 2003 but with - = : 2 : = - conditions. The Deputy Commissioner accordingly granted permission for destructions of goods and remission of the central excise duty to the tune of Rs.7,82,262/- subject to reversal of Cenvat credit of Rs.2,39,687/- availed on the inputs. The respondents were aggrieved by this condition and, therefore, though they destroyed the goods in the meanwhile, they carried the matter in appeal to the Tribunal. 3. The Tribunal referred to a circular dated 7/8/2002 issued by the Central Board of Excise & Customs, of Government of India. In paragraph 3 of that circular, the board had clarified that Modvat / Cenvat credit of duty paid on the inputs contained in finished products on which duty remission has been granted shall be admissible and reversal thereof shall not be necessary. In view of that circular which was holding the field on the date when the order of the Deputy Commissioner was passed, the Tribunal allowed the appeal filed by the respondents. This order is challenged in the present appeal. 4. Mr.Chaudhary, the learned counsel appearing for the appellant submits that subsequently another circular has been issued by the Central Board of Excise & Customs dated 1st October, 2004 and the earlier circular dated 7th August, 2002 had come to be reversed. It has been done in the light of the Judgment rendered by the Division Bench of CESTAT in the case of M/s.Mafatlal Industries Ltd. V/s. - = : 3 : = - Commissioner of Central Excise, Ahmedabad reported in 2003 (154 E.L.T. 543. Mr.Chaudhary submits that the circular was already promulgated on the date on which the Tribunal decided this matter and, therefore, the Tribunal should have take cognizance of the subsequent circular. The question of law sought to be raised is, as to whether the Tribunal was right in relying upon the circular dated 7th August, 2002 when it has been subsequently reversed. 5. In our view, the decision arrived at by the Tribunal was correct. When the Deputy Commissioner decided the application, the circular dated 7th August, 2002 was holding the field. The circular at that time clearly laid down that reversal of Cenvat / Modvat credit was not necessary. The tribunal was concerned as to whether the decision of the Commissioner was correct or not. The Tribunal could not have applied the subsequent circular which was not even issued on the date on which the Commissioner took the decision. In view of the above, there is no error in the decision arrived at by the Tribunal. 6. We express no opinion about the subsequent circular. It may be applied over to the subsequent cases. 7. Appeal is dismissed accordingly. - = : 4 : = - (H.L.GOKHALE, J.) (H.L.GOKHALE, J.) (H.L.GOKHALE, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.)