1997 (5) TMI 256 - AT - Central Excise

Summary

Issues:
1. Deemed Modvat credit on inputs received by job workers
2. Deemed Modvat credit on bazar scrap
3. Classification of electric motors as electric fans
4. Recording of copper winding wires in factory registers

Analysis:

The main issue in the appeals was the admissibility of deemed Modvat credit claimed by the appellants for purchasing aluminium scrap from the open market. The department alleged that the credit was wrongly taken as the inputs were not received in the factory premises. The adjudicating authority disallowed the credit, confiscated goods, and imposed penalties. The appellants argued that Rule 57-J and Notification No. 351/86-C.E. allowed them to take deemed Modvat credit on the aluminium scrap. The Tribunal found that Rule 57-J provides an exception for inputs received directly by job workers, thus ruling in favor of the appellants on this issue.

Regarding the second issue of deemed Modvat credit on bazar scrap, the Tribunal referenced a previous decision supporting the appellants' claim. The Tribunal upheld this issue in favor of the appellants based on the precedent set by the previous ruling.

The classification of electric motors as electric fans was another issue raised. The department claimed that the motors were indeed fans and confiscated them. The Tribunal found that the motors were used for testing purposes and not utilized in manufacturing, thus ruling in favor of the appellants regarding the electric fans issue.

The final issue involved the recording of copper winding wires in factory registers. The department alleged excess quantity, but the appellants argued they were in use or defective. However, the Tribunal found that the wires were not properly recorded, leading to their confiscation. Additionally, the Tribunal reduced the redemption fine and adjusted penalties based on the findings in each case.

In conclusion, the Tribunal modified the impugned orders, allowing deemed Modvat credit, ruling in favor of the appellants on various issues, and adjusting penalties accordingly. The appeals were disposed of based on the detailed analysis and findings on each issue presented before the Tribunal.