1998 (2) TMI 283 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit for end-cuttings of MS rounds not declared in Rule 57G.
2. Disallowance of Modvat credit for using a triplicate copy of gate pass.

Analysis:

Issue 1: Disallowance of Modvat credit for end-cuttings of MS rounds:
The appellant contested the disallowance of Modvat credit amounting to Rs. 17,066 for end-cuttings of MS rounds not declared in their Rule 57G declaration. The appellant argued that the MS scrap, although in the form of end-cuttings of MS rounds, should still be considered as MS scrap eligible for Modvat credit. The appellant's advocate highlighted that the scrap received was for melting purposes, and since MS scrap comes in various shapes, the end-cuttings should not be excluded. The Judicial Member acknowledged that MS scrap can vary in shape and is typically used for metal recovery. The Member remanded the matter for verification to confirm if the end-cuttings were indeed used for melting and metal recovery. If verified, the appellant would be entitled to the Modvat credit as declared.

Issue 2: Disallowance of Modvat credit for using a triplicate copy of gate pass:
The appellant challenged the disallowance of Modvat credit amounting to Rs. 8,574 for using a triplicate copy of a gate pass dated 23-2-1993. The appellant's advocate argued that the gate pass was pre-authenticated by Excise authorities and that corrections were permissible under Rule 173G(2)(vi) by the assessee. The Judicial Member noted the presence of a rubber stamp on the gate pass but agreed with the respondent that further verification was necessary to confirm if the correction existed at the time of pre-authentication. The Member remanded the matter to the adjudicating authority to investigate and verify if the corrections were made before pre-authentication, ensuring compliance with the relevant rules.

In conclusion, the appeal was allowed by remand for both issues to undergo re-examination based on the directions provided by the Judicial Member.