2002 (10) TMI 719 - AT - Central Excise

Issues: Classification of goods under Central Excise Tariff, Benefit of Notification No. 75/87-C.E., Entitlement to Modvat credit and small scale exemption notification

Classification of Goods Issue:
The appellants contested the order-in-appeal passed by the Commissioner (Appeals) regarding the classification of M.S. wire shelves and crisper baskets under heading 7326.20 of the Central Excise Tariff. They argued that the issue of classification was not decided during the remand process, and they were not given a chance to present their case on this crucial matter. However, the revenue contended that the appellants did not appeal against the specific remand order that focused on the eligibility for Notification No. 75/87-CE, hence they cannot raise the classification issue at this stage. The Tribunal noted that the remand was limited to considering the eligibility for the notification, and since the appellants did not challenge this order, they cannot now dispute the classification issue. Consequently, the Tribunal dismissed the appeal on this ground.

Benefit of Notification No. 75/87-C.E. Issue:
The Commissioner (Appeals) had allowed the benefit of Notification No. 75/87-CE to the appellants under the condition that they reverse the Modvat credit taken on inputs. The revenue argued that since the appellants were seeking the small scale exemption notification, they were not entitled to claim Modvat credit on inputs used in manufacturing. The Tribunal upheld the Commissioner's decision, stating that the condition imposed was valid as the appellants could not avail of Modvat credit when claiming exemption under the small scale exemption notification. Therefore, the Tribunal found no fault in the order regarding the benefit of Notification No. 75/87-CE.

Entitlement to Modvat Credit and Small Scale Exemption Notification Issue:
The appellants were claiming the benefit of the small scale exemption notification, which meant they were not entitled to Modvat credit on inputs used in manufacturing their final product. The Commissioner (Appeals) had correctly imposed the condition of reversing Modvat credit for availing the benefit of Notification No. 75/87-CE. The Tribunal concurred with this decision, emphasizing that when seeking exemption under the small scale exemption notification, the appellants could not retain the benefit of Modvat credit. Consequently, the appeal was dismissed based on this analysis.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, in this judgment, addressed the issues of classification of goods under the Central Excise Tariff, entitlement to the benefit of Notification No. 75/87-C.E., and the interaction between Modvat credit and small scale exemption notification. The Tribunal upheld the Commissioner (Appeals)' decisions on these matters, emphasizing the limitations imposed by seeking exemptions and the conditions for availing certain benefits under the Central Excise Tariff.

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