1994 (3) TMI 254 - AT - Central Excise

Summary

Issues:
1. Whether duty liability for the period 1-3-1992 to 9-3-1992 on bars and rods manufactured from duty paid ingots was correctly imposed by the Revenue.
2. Whether the applicants are entitled to MODVAT credit of duty paid on ingots used in the manufacture of bars and rods.

Analysis:

Issue 1:
The case involved a challenge to the duty liability imposed by the Revenue on bars and rods manufactured from duty paid ingots for the period 1-3-1992 to 9-3-1992. The advocate argued that the Central Government's omission in introducing an entry at serial No. 2A in the table to Notification No. 202/88 was rectified by Notification No. 53/92 dated 10-3-1992. The advocate contended that the intention was always to allow the benefit of Notification No. 202/88 even if ingots were used for conversion into bars and rods. However, the Tribunal held that duty liability was correctly imposed by the Revenue, rejecting the argument of the advocate regarding the Central Government's omission.

Issue 2:
Regarding the entitlement to MODVAT credit of duty paid on ingots used in the manufacture of bars and rods, the advocate argued that even if duty was rightly imposed, the applicants should be granted MODVAT credit under the MODVAT rules. The advocate cited a Tribunal judgment to support the claim that the applicants had a prima facie case in their favor. The Tribunal agreed with the advocate's argument, stating that MODVAT credit should be allowed to the applicants. The Tribunal directed the matters to be remanded to the adjudicating authority to verify the duty paid character of the ingots and allow the MODVAT credit, ultimately allowing the stay petitions unconditionally and remanding the matters for further action.

In conclusion, the Tribunal upheld the duty liability imposed by the Revenue but allowed the applicants to avail MODVAT credit of duty paid on ingots used in the manufacture of bars and rods. The Tribunal remanded the matters for verification of duty paid character of ingots and directed the adjustment of demanded duty against the MODVAT credit admissible to the applicants.