2004 (7) TMI 215 - AT - Central Excise

Summary

Issues:
- Challenge to order in Appeal No. 451/2003 Pondicherry dated 18-8-2003 passed by the Commissioner of Central Excise (Appeals) Chennai.
- Contravention of Rule 57F(4) and Rule 57F(11) regarding the manufacture of metal tin containers.
- Alleged wrongly availed credit and demand of a differential duty.
- Appeal by Revenue against the order setting aside the original authority's decision.
- Violation of provisions of Rule due to goods received back from job worker after the stipulated period.
- Defense based on reversal of credit at the time of sending goods and strike in the job worker's factory.
- Interpretation of Ministry of Finance clarification regarding the entitlement to credit upon receiving goods back from job worker.

Analysis:
The case involves a challenge by the Revenue against an order passed by the Commissioner of Central Excise (Appeals) Chennai, setting aside the original authority's decision regarding the contravention of Rule 57F(4) and Rule 57F(11) in the manufacture of metal tin containers. The original authority had ordered the recovery of alleged wrongly availed credit and a demand for a differential duty. The Revenue contended that the goods were received back from the job worker after the stipulated 180-day period, constituting a violation of the rules and warranting duty payment and penalty imposition.

The respondent's defense highlighted the reversal of credit at the time of sending goods and attributed the delay in receiving inputs to a strike in the job worker's factory. Reference was made to a Ministry of Finance clarification stating that manufacturers are entitled to credit even if goods are received back after the stipulated period. The respondent argued for the rejection of the Revenue's appeal based on these grounds.

Upon considering the submissions and the Ministry of Finance clarification, the Tribunal found that the goods were indeed received back after the stipulated period but were duly processed and used in manufacturing final products. It was noted that the respondent had followed Rule 57F(4) by reversing 10% of the credit while sending goods for job work. Given these circumstances and the entitlement to credit upon receiving goods back, the Tribunal upheld the order setting aside the original authority's decision. The appeal by the Revenue was rejected, concluding that the respondents should not be deprived of the credit benefit despite the delay in receiving the goods back from the job worker.