2002 (2) TMI 1128 - AT - Central Excise

Summary

Issues:
- Pre-deposit requirement under Rule 57-I of Central Excise Rules, 1944
- Modvat credit on duty paid on inputs
- Applicability of Rule 57F(4) and Rule 57F(6) of Central Excise Rules, 1944
- Job worker's duty payment and principal manufacturer's credit entitlement
- Tribunal decisions on Modvat credit and duty payment scenarios

Pre-deposit Requirement:
The appellants were directed to pre-deposit a specific sum demanded under Rule 57-I of Central Excise Rules, 1944, along with a penalty amount. However, due to the straightforward nature of the issue, the waiver of pre-deposit was granted, and the appeal proceeded for final disposal.

Modvat Credit on Duty Paid Inputs:
The appellants claimed Modvat credit on duty paid for inputs such as Woven Fabrics of Cotton Grey and Woven Fabrics of Synthetic Yarn Grey. These inputs were sent for further processing to a job worker under Rule 57F(4). The appellants also debited the duty amount equivalent to 10% of the value of the partially processed intermediate product sent to the job worker. The consultant argued that they had not taken double credit, as alleged, and had correctly availed Modvat credit on the inputs and the duty paid by the job worker.

Applicability of Rule 57F(4) and Rule 57F(6):
The appellants utilized Rule 57F(4) for sending inputs to the job worker for processing and Rule 57F(6) for debiting the duty amount before clearing goods to the job worker. The Tribunal found that the appellants had followed the necessary procedures and had not taken any double credit.

Job Worker's Duty Payment and Principal Manufacturer's Credit Entitlement:
The job worker paid the duty on the processed goods, which the principal manufacturer claimed as credit. Citing relevant Tribunal decisions, the consultant argued that the principal manufacturer was entitled to the credit when the job worker paid the duty, as confirmed by the Commissioner of Central Excise.

Tribunal Decisions on Modvat Credit and Duty Payment Scenarios:
The Tribunal referenced previous cases where it was held that when job workers paid duty, the principal manufacturer could claim credit. These decisions supported the appellants' claim for Modvat credit on duty paid by both themselves and the job worker. The Tribunal, after considering both sides, allowed the appeal, concluding that the appellants had correctly taken Modvat credit and had not availed double credit.