1997 (6) TMI 207 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit for Triethyl Glycol, Alfa Alumina, and Silicon compounds in the manufacture of POY and Polyester Flat Yarn.

Analysis:
The appellants contended that Triethyl Glycol, Alfa Alumina, and Silicon compounds are essential inputs for claiming Modvat credit under Rule 57A. They had filed a declaration under Rule 57G to support their claim. The Department disputed this, disallowing the credit and imposing a penalty. The counsel argued that Triethyl Glycol and Silicon compounds were covered by previous Tribunal decisions. Regarding Alfa Alumina, the counsel explained its role as a filtering medium for hot polymers, emphasizing its necessity in the manufacturing process. Referring to a previous Tribunal ruling, the counsel asserted that Alfa Alumina should be considered an input for Modvat credit.

The respondent, represented by the JDR, upheld the lower authorities' decision on denying Modvat credit for Triethyl Glycol and Silicon compounds. Regarding Alfa Alumina, the JDR argued that it was a component of machinery and fell under an exclusive category, making it ineligible for Modvat credit.

After considering the arguments from both sides, the Tribunal made its decision. It upheld the admissibility of Modvat credit for Triethyl Glycol and Silicon compounds based on previous Tribunal judgments. Concerning Alfa Alumina, the Tribunal analyzed its role in the manufacturing process of POY and Polyester Flat Yarn. It noted that Alfa Alumina acted as a consumable filtering medium, similar to wire mesh in the paper manufacturing process. The Tribunal concluded that Alfa Alumina was not excluded under Rule 57A and qualified as an input for Modvat credit.

Consequently, the Tribunal allowed the appeal, setting aside the penalty imposed on the appellants. Any consequential relief was deemed applicable to the appellants as per the law.