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1996 (7) TMI 218 - AT - Central Excise
Issues:
Classification of goods for duty payment and Modvat credit entitlement. Analysis: The appeal challenged the order of the Collector (Appeals) regarding the modification of classification lists, disallowance of Modvat credits, and rejection of appeals. The appellants, engaged in manufacturing DPC aluminium and copper wires, filed a classification list to pay duty at normal rates and avail Modvat credit. The issue arose as the appellants were not registered as a small scale unit or DGTD unit, leading to the disallowance of Modvat credits by the Assistant Collector. The Collector (Appeals) upheld this decision, prompting the appeal. The appellants argued that they had the option to pay duty on the final product and avail Modvat credit, as per their choice. They contended that Rule 57-I did not apply as there was no improper utilization of credit. They also asserted their entitlement to Modvat credit for duty paid on inputs used in manufacturing specified goods. The absence of a provision for lapsing Modvat credit in the Modvat scheme was highlighted. The appellants sought allowance of the appeal based on these submissions. The JDR for the respondents supported the lower authorities' findings, leading to a detailed analysis by the Tribunal. The Tribunal noted that the appellants had the discretion to avail exemption or pay duty at normal rates while claiming Modvat credit. As the appellants chose to pay duty at normal rates, their utilization of Modvat credit was deemed appropriate. Both inputs and final products being specified goods under Rule 57A, the appellants were entitled to avail Modvat credit on duty paid inputs. The Tribunal emphasized that the Modvat credit does not lapse at any point, as per Rule 57F, further supporting the appellants' position. In conclusion, the Tribunal set aside the Collector (Appeals) order and allowed the appeal, emphasizing the appellants' right to choose duty payment options and avail Modvat credit for specified goods without any lapsing provision.
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