2003 (4) TMI 110 - SC - Central Excise

Cenvat/Modvat Credit - Waste - Held that - after the issuance of the aforesaid circular as appeal was filed before this Court, the third circular was issued on 19th July, 1999 to the effect that as the Department has filed an appeal against the order of the CEGAT and as it is admitted by this Court, it has been decided by the Board to withdraw the Circular dated 23rd July, 1999. It appears that while issuing the circular dated 19th July, 1999, the concerned authority has not applied its mind to the ratio laid down by the CEGAT in IOL s case (1992 (5) TMI 131 - CEGAT, BOMBAY) wherein it has been pointed out that there is no specific provision under the Rules considering such barrels/drums as a waste arising out of manufacturing process - Decided against Revenue.

Summary

The Supreme Court dismissed the appeal by the Revenue regarding Modvat credit for metal containers not used in manufacturing final products. The Court upheld that duty is not payable on empty drums/containers if Modvat credit was availed. Circulars were issued supporting this decision, and an appeal against the CEGAT judgment was withdrawn. Multiple civil appeals were also dismissed.