2001 (11) TMI 84 - HC - Central Excise

Summary

Issues involved:
The Revenue's appeal against the order of the Custom, Excise and Gold (Control) Appellate Tribunal (CEGAT) dismissing their appeal.

Summary:

Issue 1: Modvat Credit and Duty Payment
The respondent, engaged in manufacturing PU Foam, included the weight of waste and scrap in the PU Foam articles cleared, paying duty on the total weight. The Additional Commissioner partly disallowed Modvat credit, leading to a penalty. The Commissioner (Appeals) set aside the order, stating the onus was on the Revenue to prove waste arose during PU Foam manufacture, which they failed to do. CEGAT also dismissed the Revenue's appeal.

Issue 2: Questions of Law
The Revenue raised questions on waste arising during seat manufacture, not PU Foam manufacture, and the revenue implication of waste not being an input for seat manufacture. The Revenue argued that Modvat credit was wrongly claimed due to waste not being used in seat production.

The Court found the Revenue's argument baseless, as the respondent paid duty on the actual weight of PU Foam, entitling them to claim Modvat credit. Since no revenue implication existed, the Court advised the Revenue against filing such petitions. The petition was dismissed for lacking merit.