2005 (4) TMI 484 - AT - Central Excise

Summary

Issues: Classification of goods under the Schedule to CETA, 1985; Recovery of Modvat credit taken on inputs used in the production of exempted goods.

In this case, the main issue revolves around the classification of goods under the Schedule to CETA, 1985. The respondent, engaged in the manufacture of bicycle control cables, faced a dispute regarding the classification of these cables. The lower authorities differed in their classification, with the original authority placing them under Chapter Heading 73.20, while the Commissioner (Appeals) classified them under 87.14 as bicycle parts. The Revenue contended that the assessee availed credit of duty paid on inputs used in the production of intermediate goods, which were further utilized in manufacturing Auto Control Cables. The Revenue argued that since the intermediate goods were used in the production of exempted goods, the Modvat credit taken on inputs is recoverable. However, the Commissioner's orders and the appeals did not directly address the Modvat credit issue but focused on the classification of goods under different headings. The Revenue's appeal did not stem from the Commissioner's order or the original orders mentioned, leading to the rejection of the appeal by the Appellate Tribunal CESTAT, Mumbai.

The Tribunal noted that the dispute primarily centered on the classification of goods rather than the Modvat credit issue. The Revenue's appeal did not challenge the Commissioner's order or the original orders on the grounds of Modvat credit. Since the Commissioner and the lower authorities primarily addressed the classification issue, the Tribunal found no merit in the Revenue's appeal, leading to its rejection. The judgment highlights the importance of distinguishing between issues related to classification of goods and those concerning the admissibility of credits, ensuring clarity and precision in legal proceedings.