1997 (7) TMI 386 - AT - Central Excise

Summary

Issues:
- Modvat credit eligibility based on duty payment by manufacturers
- Declaration of inputs in Modvat declaration
- Disallowance of Modvat credit by Dy. Collector of Central Excise
- Appeal allowed by Collector (Appeals)
- Review of impugned order by Appellate Tribunal CEGAT, New Delhi

Modvat Credit Eligibility Based on Duty Payment by Manufacturers:
The case involved the Respondents, engaged in manufacturing Rubber Tyres of Moped & Bicycles, who availed Modvat credit based on duty paid by manufacturers. The Respondents took Modvat credit on duty paid by M/s. Bengal Chemotex, Karun Enterprises, M/s. Uttam Enterprises, and M/s. Royal Enterprises. The Dy. Collector disallowed the Modvat credit, citing lack of evidence showing duty payment by the Respondents and non-declaration of inputs in the Modvat declaration. The Appellant argued that there was no proof of duty payment by the Respondents and that the goods in question were not received or used in the final product manufacturing.

Declaration of Inputs in Modvat Declaration:
The Adjudicating Authority found that the Respondents had not declared the input Bead Wire Rings in their Modvat declaration filed on 1-7-1992. However, the Collector (Appeals) held that the inputs were declared in the declaration and that duty was indeed paid by the Respondents, making them eligible for Modvat credit. The Appellate Tribunal noted discrepancies in the findings and the lack of discussion on critical facts in the impugned order.

Disallowance of Modvat Credit by Dy. Collector of Central Excise:
The Dy. Collector disallowed the Modvat credit and ordered recovery under Rule 51 of Central Excise Rules, 1944, along with imposing personal penalty under Rule 173Q. The Collector (Appeals) allowed the appeal, stating that duty was paid, and the inputs were declared, granting the Modvat credit to the Respondents.

Appeal Allowed by Collector (Appeals):
The Collector (Appeals) allowed the appeal, emphasizing that duty payment was established, and inputs were declared, leading to the eligibility of the Respondents for Modvat credit. The decision was challenged due to discrepancies in the findings and lack of discussion on crucial facts.

Review of Impugned Order by Appellate Tribunal CEGAT, New Delhi:
The Appellate Tribunal set aside the impugned order and remanded the matter to the Commissioner of Central Excise (Appeals), Chandigarh, for a fresh decision after granting the Respondents an opportunity for a personal hearing. The Tribunal highlighted the need for a comprehensive review considering all relevant evidence and discrepancies in the previous findings. The appeals were disposed of by way of remand for further adjudication.