2005 (4) TMI 211 - AT - Central Excise

Summary

Issues: Rectification of mistake in Tribunal's Final Order regarding Modvat credit and interest demand.

Rectification of Mistake in Final Order:
The judgment involves two applications for rectification of mistake in the Tribunal's Final Order regarding Modvat credit and interest demand. The applicants argued that since the process of drawing wire from wire rod does not amount to manufacture, the Modvat credit of duty on inputs becomes irrelevant. The Tribunal agreed with the applicants, stating that if no duty was payable or credit to be taken, the question of demanding any reversal of Modvat credit is irrelevant. The Tribunal clarified that as no duty was payable, the demand for Modvat credit reversal is not sustainable. The Tribunal rectified the mistake in the Final Order and ordered that no Modvat credit is disallowable, setting aside any demand on that count.

Charging of Interest:
Regarding the charging of interest, the Tribunal also found that since the process of drawing wire from wire rod does not amount to manufacture, the question of charging interest does not survive. Therefore, the Tribunal ordered that the demand for interest be set aside. The judgment highlights that if no duty was payable due to the nature of the process, then the demand for Modvat credit reversal and interest becomes unsustainable. The Tribunal disposed of both applications by rectifying the mistake in the Final Order and clarifying that no Modvat credit is disallowable and no interest is chargeable in this case.

Conclusion:
The judgment by the Appellate Tribunal CESTAT, New Delhi, addressed the rectification of mistake in the Final Order regarding Modvat credit and interest demand. By considering that the process of drawing wire from wire rod does not amount to manufacture, the Tribunal ruled that the demand for Modvat credit reversal and interest is not sustainable. The Tribunal's decision clarified the legal implications of the manufacturing process on duty payment and credit utilization, ultimately rectifying the mistake in the Final Order and disposing of the applications accordingly.