1989 (10) TMI 177 - AT - Central Excise

Summary

Issues:
1. Whether cut tyres and tubes are considered waste or manufactured products for the purpose of claiming modvat credit?
2. Whether the respondents are entitled to claim modvat credit on inputs used in the manufacture of cut tyres and tubes?

Analysis:

Issue 1:
The case involved two appeals concerning the classification of cut tyres and tubes as waste or manufactured products for modvat credit. The respondents, manufacturers of rubber products, cleared cut tyres and tubes under an exemption notification. The revenue argued that these products were not waste but manufactured goods falling under sub-heading 4004.00 CET, thus disallowing modvat credit. The respondents contended that the products should be classified as waste based on legal precedents. The Tribunal agreed with the respondents, citing judgments that supported the classification of cut tyres and tubes as waste. Consequently, Rule 57D applied, allowing the respondents to claim modvat credit on inputs used in manufacturing these products.

Issue 2:
The second appeal involved a dispute over the recovery of set-off availed on duty-paid inputs. The Assistant Collector initially dropped the proceedings, but upon direction from the Collector of Central Excise, filed an application before the Collector (Appeals) who dismissed the appeal. The revenue appealed this decision. The Tribunal heard arguments from both parties and upheld the Collector (Appeals) order, confirming the dismissal of the appeal and providing consequential relief to the respondents.

In conclusion, the Tribunal affirmed that cut tyres and tubes should be considered waste, not manufactured products, allowing the respondents to claim modvat credit on inputs. The second appeal's decision to dismiss the revenue's claim for recovery of set-off was upheld, providing relief to the respondents. The impugned orders were confirmed, and both appeals were dismissed with consequential relief to the respondents.