1994 (12) TMI 210 - AT - Central Excise

Summary

Issues:
1. Eligibility of MODVAT credit for Ramming Mass, Fibre glass, and filter mesh used in the manufacture of pistons.
2. Rejection of MODVAT credit on rejected pistons recycled in piston manufacture.

Analysis:
1. Ramming Mass:
The issue of MODVAT credit eligibility for Ramming Mass was raised. The Appellate Tribunal initially denied the credit, stating that the use of Ramming Mass was not integral to the manufacturing process. However, the Counsel argued citing a precedent where the benefit of MODVAT credit for Ramming Mass was allowed. The Tribunal then decided to refer the matter to the High Court for consideration based on the conflicting views. The decision to refer was influenced by the precedent set by the High Court of Calcutta.

2. Filter Mesh:
Regarding the eligibility of MODVAT credit for Filter Mesh, the Tribunal initially denied the credit, considering it as an apparatus not eligible under Rule 57A. However, the Counsel argued that the Filter Mesh was an essential input in the manufacturing process, similar to other materials allowed for MODVAT credit. The Tribunal decided to refer the matter to the High Court due to conflicting views among different Tribunal Benches, seeking an authoritative opinion on the issue.

3. Rejected Pistons:
The issue of MODVAT credit for rejected pistons recycled in the manufacturing process was raised. The Counsel referred to a precedent where such credit was allowed. However, the Tribunal held that the pistons were not declared as inputs for manufacturing, and the necessary requirements under Rule 57G were not met. Therefore, the Tribunal ruled that no question of reference arose in this case, as the applicants did not comply with the declaration requirements for MODVAT credit eligibility.

In conclusion, the Tribunal decided to refer the issues of Ramming Mass and Filter Mesh to the High Court for an authoritative opinion due to conflicting views and precedents. However, the MODVAT credit for rejected pistons was denied based on non-compliance with the declaration requirements.