2006 (10) TMI 270 - AT - Central Excise

Summary

Issues involved: Challenge to order upholding demand and penalty u/s Rule 57-I/57AH, Rule 173Q, and Section 11AB of the Central Excise Rules, 1944.

Summary:
1. The appellant, engaged in paint manufacturing, availed Modvat credit for goods received. Dispute arose regarding the nature of goods received and their use in manufacturing final products.
2. Appellant claimed to have received sub-standard paint for further use, complying with Modvat rules. Cited precedents to support their claim.
3. Department argued that goods received were fully finished and branded products, not suitable for manufacturing inferior paint. Lack of evidence of actual use for intended purpose.
4. Record showed receipt of goods without indication of being rejected or defective. Declaration made for utilizing goods in manufacturing another product.
5. Rules under Rule 173H and Rule 57G analyzed to determine admissibility of Modvat credit. Lack of evidence to support appellant's claim of using rejected goods as inputs.
6. Appellant's Modvat declaration did not match the nature of goods received. Price and nature of goods indicated they were not rejected or sub-standard.
7. Authorities concluded that appellant failed to prove the goods were rejected and used as intended inputs. Upheld decision to disallow Modvat credit.
8. Appellate Tribunal affirmed lower authorities' decision based on valid reasoning. Appeal dismissed.

*(Dictated and pronounced in the open Court on 17-10-2006)*