2002 (8) TMI 184 - AT - Central Excise

Summary

Issues:
1. Classification of goods under Modvat scheme.
2. Denial of Modvat credit based on incorrect tariff heading.
3. Interpretation of invoices and assessable value.

Analysis:
1. The appellants, engaged in manufacturing Fire Extinguishers, cleared empty cylinders from their sister units at Bombay and Chennai under the Modvat scheme. The issue arose when a show-cause notice alleged that the tariff heading declared did not match the actual goods received. The Assistant Commissioner denied Modvat credit, stating the empty cylinders were not declared as inputs. The Commissioner (Appeals) upheld this decision, leading to the current appeal.

2. The advocate for the appellants argued that the incorrect tariff heading was a mistake by the sister unit, as the goods were clearly empty cylinders, as evidenced by the description in the invoices. The JDR contended that the heading indicated 'Carbon dioxide Fire Extinguishers uncharged,' not empty cylinders. However, upon scrutiny, it was found that the goods were indeed empty cylinders, as described in the invoices and supported by the assessable value, which aligned with the cylinders, not complete Fire Extinguishers.

3. The tribunal concluded that the appellants had correctly declared the empty cylinders as inputs under the Modvat scheme, despite the incorrect tariff heading on the supplier's invoices. The mistake in the heading did not negate the receipt of duty-paid inputs in the factory. Therefore, the authorities' decision to deny Modvat credit was overturned, and the appeal was allowed, granting consequential relief to the appellants.