2003 (11) TMI 5 - AT - Central Excise

Clearance of goods under chapter X - Revenue contended that as per Rule 57C the credit on inputs is not allowable if the final product is fully exempted or cleared at nil rate of duty - held that the clearance under Chapter X or under bond is not the same thing as clearance of goods wholly exempt or goods chargeable to nil rate of duty. Therefore, the provisions of the Rule 57 C are not applicable - no infirmity in the impugned order and revenue s appeal is rejected

Summary

Issues involved:
Interpretation of Rule 57C of the Central Excise Rules regarding Modvat credit entitlement for inputs used in final products cleared without duty payment.

Detailed Analysis:

1. Issue: The appeal was filed against the Order-in-Appeal regarding Modvat credit availed by the respondents for inputs used in final products cleared without duty payment.

Analysis: The respondents were clearing final products under Chapter X of the Central Excises without payment of duty, claiming Modvat credit. The Revenue contended that as per Rule 57C, Modvat credit is not allowable if final products are cleared without duty payment. The adjudicating authority confirmed the demand, but the Commissioner (Appeals) allowed the appeal.

2. Issue: Interpretation of Rule 57C of the Central Excise Rules in light of previous Tribunal decisions.

Analysis: The Tribunal referred to previous cases like Alpha Drug India Ltd. v. CCE, Chandigarh, and others, where it was held that clearance under Chapter X or under bond is different from clearance of wholly exempt or nil-rate duty goods. Therefore, Rule 57C does not apply in such cases. The Tribunal found no infirmity in the impugned order based on settled legal positions.

3. Conclusion: The Tribunal rejected the appeal, upholding the Commissioner (Appeals) decision that the respondents were entitled to Modvat credit for inputs used in final products cleared without duty payment under Chapter X. The judgment reaffirmed the distinction between clearances under Chapter X and clearances of wholly exempt or nil-rate duty goods, as established in previous Tribunal decisions.