2009 (5) TMI 788 - AT - Central Excise

Summary

Issues involved: Classification of goods under Chapter 84 for nil rate of duty, Modvat credit claim, procedural compliance for duty payment documents, duty demands enhancement, and duty credit calculation.

Classification of Goods under Chapter 84:
The appeals involved two appellant assessees manufacturing small agricultural implements, claiming classification under Chapter 84 for nil rate of duty. The Central Excise Department contended that the goods should be assessed under Chapters 82 and 73 as hand tools and iron and steel items. The duty demands were confirmed in adjudication orders, subsequently enhanced after remands by the Tribunal.

Modvat Credit Claim:
The appellants contested the demands based on classification seeking nil rate of duty assessment under Chapter 84 and challenged a part of the demand on limitation grounds. They sought Modvat credit on inputs used in production, willing to forgo other grounds for resolution. The denial of Modvat credit by the adjudicating Commissioner was challenged citing non-filing of declaration and absence of relevant duty payment invoices.

Procedural Compliance for Duty Payment Documents:
The appellants argued that they initially claimed nil rate of duty under Chapter 84, hence did not follow Modvat Credit Procedure. The Hon'ble Supreme Court's decision in Formica India Division v. Collector of Central Excise was cited to support the claim that procedural lapses should not bar input duty credit.

Duty Demands Enhancement:
The appellants opposed further enhancement of duty demands after remands by the Tribunal, arguing that without departmental appeals, the adjudicating Commissioner lacked authority to increase duty liability in the remand proceedings.

Duty Credit Calculation:
After verifying duty payment documents, it was found that the appellants were entitled to input duty credit. The duty credits available exceeded the duty demands quantified by the department, leading to the conclusion that no net demand remained for either appellant assessee. Consequently, the impugned orders were set aside, including interest and penalties.

Conclusion:
Considering the calculations and the appellants' undertaking not to claim balance duty credit or seek cash refund, the Tribunal allowed all four appeals, finding no net demand remaining for the appellant assessees.