2003 (2) TMI 116 - AT - Central Excise

Summary

Issues involved: Whether the processes undertaken by M/s. Rico Auto Industries Limited amount to manufacture and whether they are eligible to take Modvat credit of the duty.

Summary:
The appeal filed by M/s. Rico Auto Industries Limited challenged the disallowance of Modvat credit by the Commissioner of Central Excise. The Appellants argued that the operations they conducted on Rotor Oil Filter (ROF) and Gear Shaft Drum (GSD) constituted manufacturing, making them eligible for Modvat credit. They contended that the machining operations fell under the definition of 'manufacture' as per the Central Excise Tariff. Additionally, they argued that even if the processes did not amount to manufacture, the clearance of ROF and GSD should be treated as clearance of inputs under Rule 57F(1)(ii) of Central Excise Rules. The Appellants claimed that they had already reversed more credit than the Modvat Credit taken, thus no further duty should be demanded. They also argued that the demand was time-barred, citing the availability of statutory documents with the Department.

Upon considering the submissions, the Appellate Tribunal focused on Rule 57F(1)(ii) of Central Excise Rules. It was noted that the duty liability discharged by the Appellants upon clearing the ROF and GSD exceeded the Modvat credit initially taken. Citing a similar precedent, the Tribunal held that no further amount for disallowance of Modvat credit was required to be paid by the Appellants. Consequently, the impugned Order was set aside, and the appeal was allowed.