2005 (1) TMI 425 - AT - Central Excise

Summary

Issues:
1. Challenge to allowing Modvat credit to a company.
2. Disallowance of Modvat credit on certain items.
3. Modvat credit allowed without informing the registration number of job worker.
4. Appeal regarding inputs sent to job workers after the expiry of prescribed period.

Analysis:
1. The Revenue challenged the allowance of Modvat credit to a company for duty on tiles used for flooring. The Commissioner (Appeals) had disallowed the credit on the tiles, rendering the appeal infructuous. As a result, the appeal related to Modvat credit on tiles was dismissed.

2. The Revenue contended that Modvat credit was allowed on general utility items without discussing their use in relation to the final product's manufacture. The Tribunal found this crucial, as eligibility for Modvat credit hinges on the item's use in or in relation to the final product's manufacture. Consequently, the matter was remanded to the Commissioner (Appeals) for a fresh decision after examining the utility items' use in manufacturing, following principles of natural justice.

3. The Revenue objected to Modvat credit being allowed when the job worker's registration number was not informed to the Department. However, since the inputs sent to job workers were received back by the company, the Tribunal held that the credit could not be disallowed solely for lack of registration information. Hence, the Revenue's appeal on this ground was rejected.

4. Lastly, the Revenue raised an issue regarding inputs sent to job workers and received back after the prescribed period. Citing a precedent, the Tribunal noted that the inputs were used in the final product's manufacture after being received back, even though it exceeded the stipulated period. As the inputs were utilized in production, the Tribunal found no reason to interfere with the Commissioner's decision, rejecting the Revenue's appeal on this aspect. Ultimately, all appeals were disposed of accordingly.