2004 (5) TMI 345 - AT - Central Excise

Summary

Issues:
Challenge against order passed by Commissioner (Appeals) regarding admissibility of credit on bleaching chemicals used for manufacturing coated fabrics under Central Excise Tariff Act.

Detailed Analysis:

1. The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) dated 30-11-1998. The respondent, engaged in manufacturing various fabrics falling under different chapters of the Central Excise Tariff Act, had claimed credit on three bleaching chemicals used for bleaching fabrics of Chapter 52 for manufacturing coated fabrics of Chapter 59. The adjudicating authority denied the Modvat credit and imposed a penalty. The main issue was the admissibility of credit on these bleaching chemicals.

2. The adjudicating authority rejected the reliance on BTRA's report by the respondent, stating that the information in the letter should not be used as evidence. It was also noted that no separate account was maintained for the consumption of inputs in dutiable and modvatable final products, and no documentary evidence was provided for availing proportional credit. The respondent appealed against this decision, and the Commissioner (Appeals) held that credit on the bleaching chemicals was admissible, leading to the Revenue challenging this decision.

3. The key contention raised in the appeal was the lack of separate accounts for input consumption as required by Trade Notice 46/94, the reliability of BTRA's report, and the eligibility of credit on the actual inputs used. The arguments were presented by both the learned DR and the Counsel for the Respondent.

4. The Tribunal noted that in a previous case involving the same respondent, the norms for textiles published by ATIRA/BTRA were accepted by the adjudicating authority. It was held that quantification of bleaching chemicals based on BTRA's norms for processing goods was acceptable. The Tribunal found that the Commissioner (Appeals) correctly applied the decision of the Supreme Court in a relevant case. The Revenue did not provide an alternative to BTRA's norms, and the Tribunal found no irregularity in the impugned order.

5. Consequently, the Tribunal dismissed the appeals, upholding the decision of the Commissioner (Appeals) regarding the admissibility of credit on the bleaching chemicals used for manufacturing coated fabrics under the Central Excise Tariff Act.