1993 (11) TMI 165 - AT - Central Excise

Summary

Issues:
1. Whether the appellant contravened Rule 57G of the Central Excise Rules by utilizing Modvat credit for payment of duty without declaring certain cables as finished goods.
2. Whether the demand for payment of duty in cash through PLA for cables complete cleared as spare parts is justified.
3. Whether the recovery of Modvat credit wrongly taken is time-barred.

Detailed Analysis:

Issue 1:
The case involved the appellant, a manufacturer of Miner's cap lamps, who used cables as inputs and sent them to job workers to be cut and fixed with connectors. These cables, known as 'cables complete,' were consumed in manufacturing final products and sold as spares. The lower authority alleged that the appellant contravened Rule 57G by not declaring these cables complete as finished goods for input cables. The Collector (Appeals) noted that while the appellant had not declared the cables complete as final products under Modvat Rules, they had filed classification lists and price lists for the item, clearing them on duty payment through RG 23A Part II. The lower authority's demand for duty payment through PLA instead of RG 23A Part II was challenged, arguing that the duty payment through Modvat credit was valid and legal. The order emphasized that there was no suppression or mis-declaration by the appellant, and the authorities were aware of the duty payment method. The Tribunal found no merit in the appellant's contravention of Rule 57G and dismissed the appeal by the Revenue.

Issue 2:
Regarding the demand for payment of duty in cash through PLA for cables complete cleared as spare parts, the appellant had paid duty using Modvat credit through RG 23A Part II. The lower authority contended that since the cables complete were not declared as finished products under Rule 57G, duty payment should have been in cash or through PLA. The Tribunal noted that the authorities were aware of the appellant's clearance of cables complete and their duty payment method. It was concluded that there was no suppression of facts by the appellant, and hence, the extended period of limitation under Section 11A could not be applied for duty recovery. Consequently, the Tribunal found no merit in the Revenue's appeal on this issue and dismissed it.

Issue 3:
The question of the recovery of Modvat credit wrongly taken was raised, with the appellant arguing that there was no limitation provided under Rule 57-I for such recovery. The Tribunal referred to precedents, including a Supreme Court case and a High Court decision, to establish that a reasonable period of limitation should apply in the absence of specific provisions. It was held that recovery of Modvat credit wrongly taken was maintainable within a reasonable period. Therefore, the Tribunal upheld the lower authority's order in this regard.

In conclusion, the Tribunal dismissed the Revenue's appeal on all issues, finding no merit in the contentions raised and ruling in favor of the appellant in each instance.