1997 (2) TMI 263 - AT - Central Excise

Summary

Issues:
Availability of Modvat Credit for duty on Amonia Paper, Tools, and Items not declared.

Analysis:
The appeal in this case concerns the availability of Modvat Credit for duty on Amonia Paper, Tools, and Items not declared. The Departmental Representative argued that Modvat Credit was denied because certain inputs were not declared by the respondents. The lower authority's decision was questioned, stating that mentioning the wrong sub-heading should not disqualify the assessee from Modvat Credit. The Counsel for the respondent acknowledged that for undeclared items, Modvat Credit would not be available. However, he requested a remand for verification. The Tribunal observed that Modvat Credit is not available for items not declared, but verification is needed concerning the items in question based on the filed declaration. The original authority was tasked to examine the matter for Modvat Credit eligibility.

Regarding Amonia Paper, the Departmental Representative argued that it was used before the manufacturing process of the finished product, thus not qualifying for Modvat Credit. The respondent's Counsel contended that Amonia Paper was essential for the manufacturing process and should be considered in relation to the finished product. The Tribunal clarified that Modvat Credit is only available for items used in or related to the manufacture of the finished product. Amonia Paper for drawing preparation was deemed a preparatory process, not integrally connected to the manufacturing stream, based on a Supreme Court decision. Therefore, Modvat Credit for Amonia Paper was disallowed.

Regarding Tools, insufficient details were provided in the appeal grounds and show cause notice. The lower authority did not address this issue. Consequently, the Tribunal decided to remand the matter to the original authority for a fresh examination to determine if the tools fall within the excluded category for availing benefits. The appeal was remanded for further consideration after granting the respondent an opportunity to be heard.