1992 (5) TMI 105 - AT - Central Excise

Summary

Issues:

1. Admissibility of deemed MODVAT credit on re-rollable materials used in the manufacture of Cement Spun Pipes.
2. Interpretation of Rule 57D(2) regarding the eligibility of wire as an intermediate product.
3. Comparison with previous Tribunal decisions on admissibility of credit on inputs used in the manufacture of intermediate and final products.

Analysis:

The judgment dealt with the admissibility of deemed MODVAT credit on re-rollable materials used in the production of Cement Spun Pipes. The appellants were availing this credit based on an order issued by the Ministry of Finance. The Collector of Central Excise held that the credit was not admissible as wire, a final product, was manufactured from the re-rollable material. The appellants argued that even though the wire was exempted from duty, they were entitled to the credit under Rule 57D(2) as the wire was an intermediate product in the manufacture of Cement Spun Pipes.

The Revenue contended that the appellants, producing Cement Spun Pipes, were not eligible for the credit as per the Ministry of Finance order. The key question was whether the deemed credit would be allowed for re-rollable materials used in manufacturing wire, which was an exempted input for Cement Spun Pipes. The Tribunal referred to a previous case regarding the use of Oxygen and Acetylene gas in the manufacture of steel castings, where the gases were considered inputs for both intermediate and final products.

Based on the previous Tribunal decision, the current judgment held that wire produced from re-rollable materials by the appellants constituted an intermediate product in the manufacture of Cement Spun Pipes. Therefore, the appellants were entitled to the MODVAT credit on the re-rollable materials used for producing wire. The judgment allowed the appeals and granted consequential relief to the appellants, affirming the admissibility of the credit in question.