1996 (8) TMI 322 - AT - Central Excise

Summary

Issues:
1. Proper authorization for appeal under Section 35E(2) of the Central Excise and Salt Act, 1944.
2. Excess wastage of crown corks leading to duty demand.
3. Denial of Modvat credit on wasted crown corks.

Analysis:

1. The Commissioner of Central Excise Chandigarh filed appeals against a common order passed by the Commissioner of Central Excise (Appeals) Chandigarh. The appeals were related to the demand of duty on aerated water due to excess wastage of input crown corks and the denial of Modvat credit on wasted corks. The Commissioner sought to review the Assistant Commissioner's initial decision and filed the appeals without proper authorization under Section 35E(2) of the Central Excise and Salt Act, 1944. The Commissioner (Appeals) dismissed the appeal on the ground of lack of proper authorization, stating that a mere photocopy of unsigned directions would not suffice.

2. The Appellate Tribunal, after hearing both parties, acknowledged the technical grounds for the dismissal of the appeal by the Commissioner (Appeals). However, upon considering the merits of the case, the Tribunal found that previous decisions favored the respondents. Referring to the case of Punjab Beverages v. Collector of Central Excise, the Tribunal concluded that the demand of duty based on the percentage of wastage of crown corks was not sustainable. The Tribunal held that the allegations of clandestine clearance were not supported by facts and that crown corks were prone to damage during the bottling process. Therefore, the duty demand based on wastage was deemed unjustified.

3. Furthermore, with regard to the denial of Modvat credit on the wasted crown corks, the Tribunal cited a previous decision involving the same respondents. In this case, the Tribunal held that the provisions of Rule 57D should be applied considering the nature of the inputs. It was established that damaged or rendered unfit crown corks constituted waste and should not lead to the denial of Modvat credit. The Tribunal concluded that the demand on the quantity of wasted crown corks was also unsustainable. Consequently, the Tribunal decided not to interfere with the lower authority's order, as there was no merit in the appeals. Therefore, the appeals were rejected based on the Tribunal's analysis of the legal and factual aspects of the case.