2005 (12) TMI 331 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit on purchases of Sulphuric acid
2. Duty demand for removal of manufactured goods without payment of duty

Analysis:
1. The appellant, a manufacturer of Alum, faced a denial of Modvat credit amounting to approximately Rs. 1.5 lakhs for purchases of Sulphuric acid during a specific period. The Revenue's contention was based on a private record seized during a visit, indicating an "Acid papers adjustment up to date." However, the appellant clarified that the adjustment referred to cases of low concentration Sulphuric acid consignments, where rebates were received from suppliers upon reporting the issue. The appellant provided evidence such as registers and credit notes to support their explanation. Despite failing in previous adjudication, the Tribunal found merit in the appellant's explanation, noting that the adjustment was due to the quality of Sulphuric acid and not an attempt to evade excise duty.

2. The second issue involved a duty demand of approximately Rs. 5466/- for the removal of manufactured goods without payment of duty. The appellant refuted this claim by explaining that the demand was related to the sale of ash, which is not a dutiable manufactured good. Supporting this claim, the appellant presented a cash receipt for the sale of ash. The Tribunal concurred with the appellant's argument, stating that ash does not attract excise duty as a manufactured good. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, overturning the denial of Modvat credit and dismissing the duty demand for the sale of ash. The judgment highlighted the importance of considering the specific circumstances and evidence presented by the appellant to determine the applicability of excise duty and the eligibility for credit, ultimately providing relief to the appellant based on the merits of the case.