1996 (12) TMI 224 - AT - Central Excise

Summary

Issues:
Eligibility of goods "zinc callots" for benefit of Notification No. 152/86-C.E. when credit of duty paid on aluminium ingots was taken after clearance of zinc callots.

Detailed Analysis:
The appeal by M/s. Indo National Ltd. raised the issue of whether "zinc callots" were eligible for the benefit of Notification No. 152/86-C.E. despite the credit of duty paid on the aluminium ingots, used in manufacturing the zinc callots, being taken after the clearance of the zinc callots. The company contended that they took credit for the full quantity, including the quantity used in the manufacture of already cleared zinc callots, upon receiving duty paying documents from MMTC at a later date. The adjudicating authority noted the delay in taking credit due to late receipt of documents and held that since the company utilized duty-paid ingots in manufacturing the zinc callots, the duty should have been paid at a higher rate. The authority found no merit in the argument that credit was taken after the clearance of the zinc callots.

The matter was scheduled for hearing, but no representation was made by the appellants. The respondent submitted that the credit of duty paid on zinc ingots had already been availed by the appellants, rendering the zinc callots ineligible for the concessional rate of duty. Upon careful consideration, it was observed that the company had indeed taken credit of duty paid on the inputs, making them ineligible for the concessional rate under Notification No. 152/86-C.E. The company had utilized the duty-paid inputs in manufacturing the zinc callots but claimed the concessional rate despite taking credit for the duty paid on those inputs.

The Notification No. 152/86-C.E. dated 1-3-1986 exempted specified goods of zinc, including zinc callots, from excess excise duty under certain conditions. The notification specified that the benefit would not apply if credit of duty paid on the inputs had been taken under Rule 56A or Rule 57A of the Central Excise Rules, 1944. In this case, the company had taken credit of duty paid on the inputs, which made them ineligible for the concessional rate. Despite not receiving duty paying documents from MMTC at the time of clearance, the company had utilized duty-paid inputs in manufacturing the zinc callots and availed the concessional rate of duty.

In conclusion, the Tribunal upheld the decision of the adjudicating authority, stating that the company had taken a correct view in the matter. The appeal was rejected based on the finding that the company had utilized duty-paid inputs in manufacturing the zinc callots and availed the concessional rate of duty despite taking credit for the duty paid on those inputs at a later date.