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1996 (11) TMI 118 - AT - Central Excise
Issues: Classification of inputs for deemed Modvat credit under Government of India Order dated 12-5-1986.
The judgment revolves around the dispute regarding the classification of inputs for deemed Modvat credit under the Government of India Order dated 12-5-1986. The appellant claimed deemed Modvat credit at a rate of Rs. 500/- per MT for hot rolled strips, skelp, and coils, while the department contended that only deemed Modvat credit at a rate of Rs. 365/- was admissible on the products. The key issue was whether the goods fell under sub-heading 72.12 as per the Government order to qualify for the benefit of deemed Modvat credit. The appellants argued that coils are classifiable under sub-heading 72.12 and should be eligible for the credit, even if denied on strips and skelp. The department, on the other hand, maintained that the goods did not meet the conditions specified in the order, particularly regarding falling under sub-heading 72.12. The tribunal considered both parties' submissions and analyzed the Government of India Order dated 12-5-1986. It was noted that the order allowed deemed Modvat credit on sheets not less than 5 mm in thickness falling under sub-heading 72.12. The tribunal observed that the items in question, namely strips, skelp, and coils, did not qualify as sheets, and therefore, the benefit of deemed Modvat credit at a rate of Rs. 500/- per MT was not applicable to these products. The tribunal emphasized that to claim the credit, the goods must meet both criteria of thickness and classification under sub-heading 72.12. The tribunal also highlighted that no evidence of financial hardship was presented by the appellants. As a result, the tribunal directed the appellants to deposit a specified amount within a given timeframe, with the provision for staying the recovery of the balance amount of duty during the appeal process. Failure to comply would result in the appeal being liable for dismissal without further notice, with a reporting compliance date set for the future.
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