2003 (10) TMI 559 - AT - Central Excise

Summary

Issues:
1. Modvat credit availed without filing declaration for lead-tin alloy as required under Rule 57G of Central Excise Rules, 1944.
2. Denial of Modvat credit by Revenue for lead-tin alloy.
3. Appeal by assessee against denial of Modvat credit.
4. Appeal by Revenue for recovery of amounts utilized by assessee.
5. Interpretation of Rule 57G and nexus between declared and non-declared inputs.

Analysis:
1. The case involved manufacturers of radiators who availed Modvat credit on various inputs, including lead and tin alloy, without filing a declaration as required under Rule 57G of the Central Excise Rules, 1944.
2. The Revenue issued a show cause notice directing recovery of amounts utilized by the assessee for availing Modvat credit on lead-tin alloy. The original authority upheld the allegation, but the Commissioner (Appeals) noted that Modvat credit cannot be denied based on a Tribunal judgment establishing a nexus between declared and non-declared inputs falling under the same Chapter and sub-heading.
3. The Commissioner (Appeals) found that the lead-tin alloy used by the assessee fell under the same Tariff heading as declared inputs and that the declaration filed by the assessee sufficiently indicated the utilization of lead alloy. Therefore, the denial of Modvat credit by the Revenue was deemed unsustainable.
4. The assessee appealed against the denial of Modvat credit by the Commissioner (Appeals) on the same item of lead-tin alloy, seeking to overturn the decision.
5. After hearing arguments from both sides, the Tribunal found that the assessee had declared the main items of lead and tin, with a mention of lead alloy utilization in the declaration. The Tribunal upheld the Commissioner (Appeals)' decision, citing the established nexus between tin alloy, lead, and lead alloy, as per the Tribunal judgment referenced in the order.
6. The Tribunal rejected the Revenue's appeal, noting that the assessee's declaration sufficiently established the link between the declared and non-declared inputs, thereby allowing the Modvat credit on lead-tin alloy. The Tribunal also allowed the assessee's appeal and disposed of the stay application in their favor.