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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2004 (4) TMI AT This

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2004 (4) TMI 431 - AT - Central Excise

Issues: Eligibility to take Modvat credit of duty paid by job worker.

Analysis:
The appeal in question revolves around the eligibility of M/s. Abhishek Auto Industries Ltd. to claim Modvat credit for duty paid by a job worker. The Appellants, manufacturers of safety seat belts and power windows, had sent inputs to a job worker under Rule 57F(4) of the Central Excise Rules, 1944. The job worker used these inputs to manufacture intermediate products, paying duty on them before returning them to the Appellants. The core issue was whether the Appellants could claim Modvat credit for the duty paid by the job worker. The Appellants argued that Rule 57F(4) does not prohibit the job worker from adding their own materials or paying duty, emphasizing that similar cases had been ruled in favor of Modvat credit eligibility.

The Appellants contended that since the job worker paid duty on the intermediate products, they, as the final product manufacturers, were entitled to claim Modvat credit for the duty paid by the job worker. The Tribunal examined Rule 57F(4), which allows inputs to be sent to job workers for manufacturing intermediate or final products. It was noted that the job worker had indeed paid Central Excise duty on the intermediate products. The Tribunal referenced previous cases, including Facit Asia Ltd., to support the Appellants' position. It was established that the Appellants had already accounted for the duty paid by the job worker on the intermediate goods, thus justifying their right to claim Modvat credit. Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed in favor of the Appellants.

In conclusion, the judgment clarifies the entitlement of manufacturers to claim Modvat credit for duty paid by job workers on intermediate products. The decision underscores the importance of adherence to relevant rules and previous legal precedents in determining such eligibility, ensuring fair treatment and compliance within the excise duty framework.

 

 

 

 

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