1991 (2) TMI 286 - AT - Central Excise

Summary

Issues:
Jurisdiction of the Bench, Modvat credit on release paper, Time bar for demand, Classification of release paper as equipment/appliance.

Jurisdiction of the Bench:
The appeal questioned the jurisdiction of the Bench to hear the matter, which both parties agreed did not involve classification, valuation, or rate of duty, falling within the Bench's jurisdiction. The Bench confirmed its jurisdiction based on this agreement.

Modvat Credit on Release Paper:
The appellant, engaged in manufacturing textile fabrics, used release paper in the lamination process and claimed modvat credit, which was disallowed by the Assistant Collector. The appellant argued that release paper, coated with a silicon layer, qualifies as an input under Rule 57A, necessary for the manufacturing process. They cited notifications and previous cases to support their claim. The department contended that release paper was an equipment/appliance and not an eligible input. The Tribunal held that release paper did not fall under the exclusion clause of Rule 57A and allowed the modvat credit.

Time Bar for Demand:
The appellant argued that the demand was time-barred for the period before 27-8-1987, citing relevant provisions and previous Tribunal decisions. The department contended that the show cause notice was not time-barred under Rule 57-I. The Tribunal did not delve into this issue as the modvat credit was allowed on its merits.

Classification of Release Paper as Equipment/Appliance:
The department argued that release paper should be considered an equipment/appliance, falling under the exclusion clause of Rule 57A. The Tribunal analyzed the nature of release paper, its use, and classification under Customs Tariff. Relying on previous Tribunal decisions, the Tribunal held that release paper did not qualify as equipment/appliance, allowing the appeal and setting aside the orders of the Assistant Collector and Collector (Appeals).

In conclusion, the Tribunal upheld the appellant's claim for modvat credit on release paper, rejecting the department's arguments regarding its classification as an equipment/appliance. The Tribunal did not address the time bar issue as the appeal succeeded on its merits.