2006 (7) TMI 539 - AT - Central Excise

Summary

Issues:
Eligibility to avail actual credit or restricted credit under Notification No. 177/86-C.E. (N.T.) dated 1-3-1986.

Analysis:
The judgment deals with the issue of eligibility to avail actual credit or restricted credit under Notification No. 177/86-C.E. (N.T.) dated 1-3-1986. The assessee, engaged in manufacturing various castings of Iron and Steel, received inputs from ship breaking. The impugned Notification restricted the Modvat credit for inputs obtained from breaking of ships manufactured in India. The proviso to the Notification specified the extent of credit based on the duty paid. The Commissioner (Appeals) examined the case concerning the quantum and applicability of the Notification. The appellants contended that the Notification applied to Indian-made ships, not foreign origin ships, and the goods fell under different chapter headings. They argued that a previous case was not applicable as it dealt with a different Notification.

The Tribunal clarified that the Notification applied to inputs derived from ship breaking in India, regardless of the origin of the ships. The appellants' interpretation was deemed incorrect. The Notification referred to goods derived from ship breaking within India, including those of foreign origin. The goods falling under specific chapter headings were relevant, and the contention regarding a previous case's applicability was dismissed. The Tribunal found that both lower authorities had correctly interpreted the Notification, and the appellants' contentions were unfounded. Consequently, the appeal was dismissed, affirming the lower authorities' decision.