1991 (8) TMI 214 - AT - Central Excise

Summary

Issues Involved:
1. Admissibility of Modvat credit for items listed.
2. Deemed credit for items exempted from duty under conditional notifications.
3. Use of certain items as inputs for manufacturing sand moulds and sand cores.
4. Eligibility of chemicals used in sand moulds and sand cores for Modvat credit.
5. Cross-objections regarding Nickel and Tin items.

Detailed Analysis:

1. Admissibility of Modvat Credit for Items Listed:
Both sides agreed that the appeals involved the issue of Modvat credit admissibility for specific items. The Tribunal previously decided on the admissibility of deemed credit for items exempted from duty under conditional notifications, and similar orders were requested for this case.

2. Deemed Credit for Items Exempted from Duty Under Conditional Notifications:
The Tribunal confirmed that items 1 to 7 in Annexure I, which were exempted from duty under conditional notifications and purchased from the market, were eligible for deemed credit. This decision was consistent with previous Tribunal orders, including A/532-542/90-NRB dated 20-12-1990. Consequently, the department's appeal regarding these items was rejected, and the Collector (Appeals) orders were confirmed.

3. Use of Certain Items as Inputs for Manufacturing Sand Moulds and Sand Cores:
The department argued that items 8 to 12 were used for producing sand moulds and cores, not as inputs for final products. Therefore, Modvat credit was not available for these items, as supported by Tribunal decisions in Muzzaffarnagar Steels and Mysore Kirloskar Limited cases. The learned counsel contended that these moulds and cores were not apparatus or equipment in the normal sense but were used in the production process, thus qualifying for Modvat credit.

4. Eligibility of Chemicals Used in Sand Moulds and Sand Cores for Modvat Credit:
The Tribunal observed that chemicals used in the preparation of sand moulds and cores were inputs in the manufacturing process of metal valves and cocks. The sand cores and moulds, which temporarily come into existence during manufacturing, do not alter the fact that the chemicals act as inputs for the final product. The Tribunal concluded that Modvat credit should be extended to such inputs indirectly used in the production process.

5. Cross-Objections Regarding Nickel and Tin Items:
The respondents raised cross-objections for Nickel and Tin items (13-14), which the department did not address in its appeal. The learned counsel argued that these items were purchased from MMTC, and invoices were produced. The Assistant Collector had disallowed credit due to the lack of certificates. The Tribunal allowed the respondents' application under Rule 23 and remanded the matter to the Assistant Collector for re-adjudication, considering the documents filed under Rule 23 and allowing further submissions if required.

Conclusion:
The Tribunal rejected the department's appeal regarding items 1 to 7 and confirmed the Collector (Appeals) orders. The matter concerning Nickel and Tin items was remanded for re-adjudication. The Tribunal concluded that chemicals used in sand moulds and cores were eligible for Modvat credit as inputs in the manufacturing process of metal valves and cocks. All ten appeals and cross-objections were disposed of accordingly.