1997 (10) TMI 170 - AT - Central Excise

Summary

Issues: Modvat credit on steel waste and scrap disallowed under Rule 57H.

The judgment involves an appeal filed by the Revenue against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Allahabad. The respondents, engaged in the manufacture of Pipes and Tubes, filed a Modvat claim under Rule 57H of Central Excise Rules, 1944 for credit on waste and scrap of steel. The dispute arose regarding the admissibility of the Modvat credit under Rule 57H, which allows credit only if the inputs are used in the manufacture of final products cleared after a specific date. The Assistant Commissioner disallowed the credit, citing that the waste and scrap related to a period before the specified date when pipes and tubes were exempt from duty. The Assistant Commissioner held that the waste and scrap could not be considered as inputs for the final product. The Commissioner (Appeals) set aside the Assistant Commissioner's order and allowed the appeal, emphasizing that Rule 57H permits credit if the inputs are used in the manufacture of final products cleared after the specified date. The Commissioner of Central Excise found that the inputs were indeed present on the relevant date and met the conditions of Rule 57H. However, the Commissioner of Appeal did not address the issue of duty payment on the inputs, leading to the judgment being set aside and remanded for a fresh decision after granting a personal hearing to the respondents.

In conclusion, the judgment revolves around the interpretation and application of Rule 57H of the Central Excise Rules, specifically concerning the admissibility of Modvat credit on waste and scrap of steel. The conflicting views between the Assistant Commissioner and the Commissioner (Appeals) regarding the eligibility criteria and usage of inputs for claiming credit under Rule 57H led to the appeal and subsequent remand for further consideration.