2004 (10) TMI 122 - AT - Central Excise

Summary

Issues:
1. Condonation of delay in filing appeals.
2. Disallowance of Modvat Credit on inputs used in the manufacture of Matador.
3. Allowance of Modvat Credit on tool kits.
4. Eligibility of tool kits as inputs for Modvat Credit.

Condonation of Delay:
The Revenue filed three appeals against the Order-in-Appeal allowing Modvat Credit to a company. The Revenue sought condonation of delay in filing two supplementary appeals, explaining that they initially filed one appeal within the specified time. The Tribunal, after hearing both sides, condoned the delay as the main appeal was filed within the time limit specified by law.

Disallowance of Modvat Credit on Matador Inputs:
The Revenue argued that Modvat Credit on inputs used in the manufacture of Matador cannot be utilized for Tempo Travellers. They contended that the credit should only be used for the final product from the same inputs. However, the Commissioner (Appeals) allowed the credit based on a previous decision. The Tribunal upheld this decision, stating that the inputs were used in the manufacture of motor vehicles, allowing the credit for payment of duty on any motor vehicle.

Allowance of Modvat Credit on Tool Kits:
The Revenue claimed that tool kits should not be considered inputs for Modvat Credit based on legal precedents. The Respondent argued that tool kits are essential for the marketability of motor vehicles. The Tribunal noted conflicting decisions but ultimately disallowed Modvat Credit on tool kits, following the legal position that tool kits are not eligible inputs for the credit.

Eligibility of Tool Kits for Modvat Credit:
The Tribunal referred to various legal judgments regarding tool kits as inputs for Modvat Credit. Despite a previous Tribunal decision allowing such credit, the Tribunal concluded that tool kits do not qualify as inputs based on the legal positions established by the High Court and Supreme Court. Consequently, the appeals by the Revenue were partly allowed concerning the Modvat Credit on tool kits.

In conclusion, the Tribunal partly allowed all three appeals filed by the Revenue, addressing issues related to the condonation of delay, Modvat Credit on inputs used in the manufacture of Matador, and the eligibility of tool kits for Modvat Credit.