1996 (8) TMI 553 - AT - Central Excise

Summary

Issues:
Appeal against order demanding duty on excess wastage of crown cork and denial of Modvat credit for wasted corks.

Analysis:
The Commissioner of Central Excise Chandigarh filed appeals against a common order demanding duty on excess wastage of crown cork and denying Modvat credit for wasted corks. The department claimed that the excess wastage of crown cork led to clandestine clearance of final products. The Commissioner sought review under Section 35E(2) of the Central Excise and Salt Act, 1944, as the Assistant Commissioner initially dropped the demands. However, the Commissioner (Appeals) dismissed the appeal citing lack of proper authorization from the Commissioner.

During the hearing, the Tribunal noted that the issues were covered in favor of the respondents based on previous Tribunal decisions. In the case of Punjab Beverages v. Collector of Central Excise, the Tribunal held that demanding duty based on wastage of crown cork without proper inquiry was not sustainable. The Tribunal observed that crown corks often get damaged during the manufacturing process, and demanding duty based on wastage percentage was unjustified. Similarly, in another case involving the present respondents, the Tribunal ruled that Rule 57D should be applied based on the nature and description of inputs. The Tribunal held that damaged crown corks should be considered waste and not eligible for Modvat credit.

Considering the precedents and the arguments presented, the Tribunal found no merit in interfering with the lower authority's order. The Tribunal rejected the appeals, stating that the demands for duty on excess wastage of crown cork and denial of Modvat credit for wasted corks were not sustainable based on legal principles established in previous Tribunal decisions.