2000 (11) TMI 239 - AT - Central Excise

Summary

Issues:
- Denial of Modvat credit in respect of Fire Bricks/Refractory Bricks and other Refractories
- Denial of Modvat credit for certain chemicals and resins used in manufacturing
- Denial of Modvat credit for Foundry Chemicals/Fluxes and Coating Materials
- Denial of Modvat credit based on address discrepancies in invoices
- Denial of Modvat credit for ramming mass and UNISET-710
- Denial of Modvat credit based on wrong name in invoice
- Challenge of show cause notice on limitation grounds
- Setting aside of penalty due to setting aside of demand

Analysis:
1. The Tribunal reviewed the denial of Modvat credit for Fire Bricks/Refractory Bricks and other Refractories. It was noted that previous decisions excluded only complete machines from being considered as inputs, not parts thereof. Relying on various precedents, the Tribunal allowed Modvat credit for Fire/Refractory Bricks.

2. The denial of Modvat credit for certain chemicals and resins used in manufacturing Sand Cores was challenged. The appellants argued that these items were essential for manufacturing their final products. Citing relevant decisions and a circular by the Central Board of Excise and Customs, the Tribunal allowed the Modvat credit for these items.

3. The denial of Modvat credit for Foundry Chemicals/Fluxes and Coating Materials was examined. The Tribunal found that these materials were directly used in the manufacturing process of the final products, based on submissions and relevant precedents. Therefore, the Tribunal allowed the Modvat credit for these items.

4. Address discrepancies in invoices leading to the denial of Modvat credit were disputed. The Tribunal accepted the appellants' explanation that goods were received and utilized in the factory, despite the head office address being mentioned. Citing relevant decisions and a circular by the Ministry of Finance, the Tribunal allowed the Modvat credit in this regard.

5. The denial of Modvat credit for ramming mass and UNISET-710 was reviewed. The Tribunal referenced a previous decision that deemed ramming mass as admissible inputs, thus allowing the Modvat credit. Additionally, the Tribunal allowed the credit for UNISET-710, considering it a procedural aspect that should not hinder the substantive benefit.

6. A challenge regarding the wrong name in an invoice leading to the denial of Modvat credit was addressed. The appellants admitted the error but did not contest the denial of credit for that specific amount. The Tribunal confirmed the denial of credit for the wrongly named item.

7. The challenge of a show cause notice on limitation grounds was briefly mentioned. Since the appeal was allowed on merits except for a specific amount, the Tribunal did not delve into the limitation aspect.

8. Finally, the setting aside of the penalty due to the setting aside of the demand was highlighted. The Tribunal confirmed a specific duty amount against the appellants while setting aside the remaining duty and penalty, thereby allowing the appeal to that extent.