Per V.P.Gulati :

The prayer in the application is for dispensation of pre-deposit of the following amounts demanded from the appellants in terms the various show cause notices which were issued and which culminated in passing the impugned order :-

Rs.1,92,352/-

Rs.1,22,388.80

Rs.1,89,822/-

The total amount aggregates to Rs.4,44,562.80. The short point involved is whether in case of the stock transfer of the goods from one unit of the appellant to the other unit when the goods manufactured in one unit which have been cleared on payment to the godown the benefit of modvat credit could be denied, when the goods moved under the advice note which contained all the necessary particulars are required under law.

2. The learned advocate for the appellants has pleaded that the issue stands covered by the decision of the tribunal in the case of CCE Vs. MODERN FOOD INDUSTRIES (INDIA) LTD reported in 1988 (37) ELT 294 (T) wherein in para 7 the tribunal has held as follows :-

7. We have carefully considered the facts of the case and the submissions made before us. As per the order in appeal the transaction between the manufacturer and the branches cannot be considered as sale because it is mere transfer of products to these branches on book adjustments. We are unable to accept this finding. The learned Collector (Appeals) in this connection ignored the definition of sale as contained in Section 2 (h) of the Central Excises and Salt Act, 1944, which clearly includes transfer of the possession of goods of the kind as represented by the transactions in this case. There is no denial on behalf of the respondents that the transfer memos are indicative of their being monotary consideration in the transaction between the transfer and transferee. Merely because there is no payment in cash or because there is book adjustment, it cannot be claimed that there has been no sale. Book adjustment is also a form of payment. Once we hold that these transactions are in the nature of sale, then it is quite clear that the learned Collector (Appeals) has erred in coming to the view that the goods are not "ordinarily intended for sale". The fact is, that they are in fact manufactured for sale to the sister units.

He has pleaded that unfortunately this decision of the tribunal could not be cited before the learned lower appellate authority.

3. Heard the learned JDR for the department. He has pleaded that the facts regarding the book adjustments are not on record and in case the appellants satisfy the criteria as has been laid down by the tribunal he has no objection to the matter being re-examined in the light of the decision of the tribunal.

4. The learned advocate has pleaded that the appellants in fact have done the book adjustment and therefore the ratio of the decision of tribunal would be applicable.

5. We observe that the modvat scheme is a beneficent piece of legislation and the spirit of the scheme is that the cascading effect of the duty should be obviated. Keeping that in mind, we have to consider whether in the circumstance, for a multi unit organisation where the goods manufactured in one unit get to be transferred by book adjustment by another unit whether the modvat credit could be denied, just because there is no sales invoice issued and that subsequently the book adjustment is made in this regard. We observe that the documentation provided under rule 57G is to ensure that the goods in fact have been transferred from one person to the other and the duty in respect of the inputs in question has been paid and in respect of which the modvat credit could be taken. These are the parameters which should be kept in mind while considering the plea of the appellant. The tribunal, we observe, has rightly held that in a contingency like this, taking into consideration the definition of sale as provided for under section 2 (h) of Central Excise the book adjustment made would be adequate to give the transaction the stamp of sale. In view of the above, prima facie, we