2004 (9) TMI 695 - AT - Central Excise

Summary

Issues Involved: Availability of Modvat Credit on duty paid inputs used in the manufacture of excisable goods exempted under Notification No. 214/86-CE.

The judgment revolves around the issue of whether Modvat Credit is available to M/s. Vulcan Electro Control (P) Ltd. for duty paid on inputs used in manufacturing excisable goods exempted under Notification No. 214/86-CE. The Appellants argued that the goods processed on a job work basis are not exempted as the principal manufacturer clears them on payment of duty. This contention was supported by referencing a previous decision by the Appellate Tribunal in the case of Jindal Polymers v. CCE, Meerut, where it was established that the final product must be subject to excise duty, and the credit extends to the stage of clearance by the principal manufacturer. The Tribunal also cited precedents in the cases of Bajaj Tempo v. CCE and Shakti Insulated Wires Ltd. v. CCE & C, Mumbai-IV to support the decision. Consequently, the impugned Order was set aside, and the appeal was allowed.

In this case, the Appellants, M/s. Vulcan Electro Control (P) Ltd., were seeking Modvat Credit for duty paid on inputs used in manufacturing excisable goods exempted under Notification No. 214/86-CE. The dispute arose as the department disallowed the credit, arguing that the inputs were used in the manufacture of exempted goods. However, the Appellants contended that the goods processed on a job work basis were not exempted, as the principal manufacturer cleared them on payment of duty. The Tribunal referenced the decision in Jindal Polymers v. CCE, Meerut, to establish that the credit should extend to the stage of clearance by the principal manufacturer on payment of duty. This interpretation was further supported by precedents in the cases of Bajaj Tempo v. CCE and Shakti Insulated Wires Ltd. v. CCE & C, Mumbai-IV, leading to the setting aside of the impugned Order and allowing the appeal.

The central issue in this appeal by M/s. Vulcan Electro Control (P) Ltd. was the availability of Modvat Credit for duty paid on inputs used in manufacturing excisable goods exempted under Notification No. 214/86-CE. The Appellants argued that the goods processed on a job work basis were not exempted, as the principal manufacturer cleared them on payment of duty. This argument was supported by the Tribunal's decision in Jindal Polymers v. CCE, Meerut, which emphasized that the credit should extend to the stage of clearance by the principal manufacturer on payment of duty. The Tribunal also relied on precedents in the cases of Bajaj Tempo v. CCE and Shakti Insulated Wires Ltd. v. CCE & C, Mumbai-IV to support their decision to set aside the impugned Order and allow the appeal.