1990 (12) TMI 241 - AT - Central Excise

Summary

Issues:
1. Correct allowance of MODVAT Credit for Molybdenum wire scrap.
2. Compliance with Notification 177/86-C.E. regarding declaration of inputs.
3. Interpretation of Rule 57A and Rule 57(G) of the MODVAT Rules.

Analysis:
1. The appeal concerns the Collector of Central Excise challenging the allowance of MODVAT Credit for Molybdenum wire scrap. The main issue is whether the declaration of "Molybdenum" by the Respondents covers Molybdenum wire scrap. The Collector (Appeals) allowed the credit, stating that the declaration of Molybdenum covers both Molybdenum scrap and wire, falling under the same Chapter 81. The Collector (Appeals) emphasized that the duty-paying nature of Molybdenum was not in doubt and that the heading was covered under a relevant Notification.

2. The Department argued that the Respondents' declaration of Molybdenum did not specifically cover Molybdenum scrap, which they claimed was the actual input for which the credit was taken. However, it was acknowledged that both Molybdenum scrap and Molybdenum fall under the same Chapter 81. The Department contended that Rule 57A requires manufacturers to specify the intended inputs, and MODVAT credit cannot be granted for undeclared inputs.

3. The Tribunal noted that both Molybdenum scrap and Molybdenum are covered under Chapter 81 as specified inputs in Notification 177/86-C.E. under Rule 57A. The Tribunal highlighted that the Notification requires declaration by relevant chapter heading, which the Respondents had complied with. Referring to Departmental instructions, the Tribunal emphasized that as long as descriptions and sub-headings for inputs and final products are provided, MODVAT Credit can be allowed if inputs are used in manufacturing. The Tribunal concluded that the Respondents' declaration of "Molybdenum" with the chapter heading was sufficient for compliance with Rule 57A and Rule 57(G), upholding the Collector (Appeal)'s decision and rejecting the Revenue's appeal.