1998 (5) TMI 103 - AT - Central Excise

Summary

Issues:
1. Whether credit of duty paid on inputs used in captively consumed products exempted from excise duty can be allowed?
2. Whether credit can be allowed if final products were not declared in the filed declaration under Rule 57G?

Issue 1:
The case involved the question of allowing credit of duty paid on inputs used in captively consumed products exempted from excise duty. The respondents were manufacturing certain products and availing Modvat credit on inputs used in the manufacturing process. The Department raised a demand stating that credit was not available on inputs used in products removed at nil rate of duty under a specific notification. The Tribunal, in its Final Order, treated the products as intermediate products in the manufacturing process of other products cleared on payment of duty, allowing the appeal and applying relevant provisions. The reference application was made to determine the legality of extending credit in such scenarios.

Issue 2:
The second issue revolved around whether credit could be allowed if the final products were not declared in the filed declaration under Rule 57G. The Department argued that since the final products were not specifically declared in the declaration, credit should not be extended. The learned Counsel for the respondents contended that since the final products were part of the classification lists filed during the relevant period, they were effectively declared. The Counsel highlighted that the sufficiency of the declaration was a question of fact, not requiring reference. The Tribunal referred to previous cases to determine that the sufficiency of the declaration under the Modvat scheme was indeed a question of law, necessitating reference to the High Court.

In conclusion, the Tribunal decided to refer the question of law regarding the sufficiency of the declaration for extending Modvat credit on the mixtures of products to the jurisdictional High Court. The decision emphasized the distinction between cases where items were already declared as inputs for final products and cases where such declarations were lacking, impacting the eligibility for credit.