1996 (1) TMI 235 - AT - Central Excise

Summary

Issues:
Appeal against denial of Modvat credit for inadequate description of manufactured products.

Analysis:
The judgment involves two appeals challenging the order of the C.C.E. (Appeals), Madras regarding the denial of Modvat credit due to inadequate product description. The first issue addressed is the denial of Modvat credit to the assessee for not adequately declaring all three products manufactured. The Revenue contested the re-credit allowed by the lower authority, arguing that it should have been adjudicated by the Assistant Collector first. The Tribunal decided to address the assessee's appeal first, as its outcome would impact the revenue's appeal.

The second issue revolves around the declaration made by the appellants under Rule 57G for inputs used in manufacturing propylene glycol. The jurisdictional Superintendent raised queries regarding the range of products manufactured, including mono-propylene, di-propylene, and tri-propylene glycol. The lower authority held that the description of propylene glycol only covered mono-propylene glycol, not the other varieties. The appellants explained the manufacturing process, stating that all three propylene glycol types emerged sequentially using the same inputs and were sold as finished products. They argued that their declaration was adequate, supported by detailed explanations and technical aspects.

The Tribunal considered whether the term "propylene glycol" was sufficient for the declaration under Rule 57G. It noted that propylene glycol is manufactured in three varieties, all technically described as propylene glycol with specific suffixes. Since the same raw materials were used for all three varieties, the Tribunal assessed whether the declaration caused ambiguity or disadvantaged the revenue in controlling input use and Modvat credit utilization. Recognizing the beneficial nature of the Modvat scheme to prevent duty cascading, the Tribunal found that the appellants' declaration was clear and that authorities were informed about the range of products manufactured. Consequently, the Tribunal ruled in favor of the assessee, allowing Modvat credit for all three propylene glycol varieties based on the filed declaration. As a result, the revenue's appeal was dismissed, and the assessee's appeal was allowed with consequential relief.