2003 (6) TMI 351 - AT - Central Excise

Summary

Issues:
Claim for Modvat credit on goods received from job workers under Rule 57F(2) challans.

Analysis:
The appellants, manufacturers of excisable goods, cleared laminations and stampings to job workers under Rule 57F(2) challans, on which Modvat credit was taken. The job workers returned the intermediate product, die cast rotor, to the appellants, who then claimed Modvat credit of the duty paid on laminations and stampings. The department proposed to disallow the credit, leading to a demand of Rs. 3,52,717.14, which was confirmed by the adjudicating authority and the first appellate authority. The appeal challenges this decision.

The Tribunal considered the facts and previous judgments. The appellants relied on a previous order in their own case where a similar demand was vacated. They also cited CBEC's Circular and a Larger Bench decision. After examination, the Tribunal found similarities with the previous case where the party was allowed Modvat credit under Rule 57F(2) for duty paid on inputs cleared to job workers. The Tribunal held that the party was entitled to take Modvat credit of the duty paid on inputs used in the manufacture of the intermediate product and utilize it for final products, as per Rule 57J. The lower authorities erred in denying this benefit without rebutting the party's claim or establishing non-compliance with Rule 57A conditions.

The Tribunal, following the previous order, allowed the appeal, stating that the appellants were entitled to avail the Modvat credit. It clarified that the Board's circular and the Kamakhya Steels decision were not applicable to this case. Therefore, the impugned order disallowing the credit was set aside, and the appeal was allowed.