2008 (12) TMI 739 - AT - Central Excise

SSI exemption - denial on the ground that assessee availed CENVAT/MODVAT credit - It is also the case of the department that scrap being the result of manufacture, duty is required to be paid at the time of its clearance

Summary

The Appellate Tribunal CESTAT CHENNAI, comprising of Jyoti Balasundaram and P. Karthikeyan, heard the case of small-scale manufacturers who were involved in manufacturing electric motors, parts of power driven pumps, and iron castings. The manufacturers availed SSI exemption for some products and MODVAT credit for others. The department contested the eligibility of the manufacturers for SSI exemption based on the MODVAT credit availed. The Tribunal referred to previous decisions and ruled in favor of the manufacturers. The Tribunal also held that the manufacturers were liable to pay duty on the scrap generated during the manufacturing process. The appeals were partly allowed, and penalties imposed on the manufacturers were set aside. Cross objections were dismissed. The judgement was dictated and pronounced in open court.