1996 (9) TMI 267 - AT - Central Excise

Modvat - Welding Electrodes Silicon Carbide Grains Fibre Jointing Sheets - Deemed credit on A.S. Rounds

Summary

Issues:
Denial of Modvat credit on welding electrodes, copper/copper scrap, silicon carbide grains, valve actuator, fibre jointing sheet, and A.S. rounds.

1. Welding Electrodes:
The Assistant Commissioner initially categorized welding electrodes as tools or appliances, denying Modvat credit. However, upon further examination, it was established that the welding rods are used for filling up cavities in castings, making them consumable items eligible for Modvat credit. The Tribunal ruled in favor of allowing Modvat credit based on the authority's own revised findings.

2. Copper/Copper Scrap:
The department denied deemed credit under Rule 57G of C.E. Rules on copper/copper scrap. The appellant argued that a portion of the deemed credit involved was clearly non-duty paid, while the rest was purchased from open markets with supporting documents like invoices. The Tribunal directed the Assistant Commissioner to reexamine the claim and extend deemed credit if satisfied with the duty paid nature of the purchase.

3. Silicon Carbide Grains:
Modvat credit on silicon carbide grains was initially denied by the Assistant Commissioner, citing that the final product could be manufactured without them. However, the same authority, in a subsequent order, acknowledged that the grains play a role in smoothing and finishing surfaces, essential for manufacturing gate valves. The Tribunal held that Modvat credit on silicon carbide grains is permissible to the appellants based on the authority's revised stance.

4. Valve Actuator:
Modvat credit on valve actuators was denied due to the appellants not amending their declaration to reflect a classification change by the supplier. The Tribunal found this to be an invalid ground for denial as long as the description of the inputs received matches the declaration under Rule 57G. Therefore, the Tribunal ordered the allowance of Modvat credit for valve actuators.

5. Fibre Jointing Sheet:
The use of fibre jointing sheets as washers in the final product to prevent leakages and maintain pressure tightness rendered them eligible for Modvat credit. The Tribunal determined that the sheets qualify as inputs used in the manufacture of the final product, thus ordering the allowance of Modvat credit.

6. A.S. Rounds:
Deemed credit on A.S. rounds was initially denied due to a blank certificate from SAIL in the challan for duty payment particulars, despite the availability of duty payment details in the same challan. The Tribunal considered the blank certificate a condonable lapse in this specific case and directed the allowance of deemed credit for A.S. rounds.

The Tribunal disposed of the appeals concerning various other inputs as the appellants did not press their claims for Modvat credit on those items.