1999 (3) TMI 173 - AT - Central Excise

Summary

Issues:
Determining entitlement to clear inputs for home consumption at concessional duty rate under Modvat scheme.

Analysis:
The limited issue in this appeal was whether the respondents could clear inputs for home consumption by paying duty equal to the amount paid by the suppliers enjoying concessional duty as a Small Scale Industry (SSI) unit. The respondents, manufacturers of aerated water, cleared crown cork and Carbon dioxide gas in November 1993 by debiting duty equal to Modvat credit. The department contended that duty should be paid as if the inputs were manufactured in their factory, issuing a show cause notice. The Assistant Commissioner upheld the demand and imposed a penalty, but the Commissioner (Appeals) reversed this decision, citing a precedent. The Revenue appealed this decision.

The Departmental Representatives argued that Rule 57F(1)(ii) mandated duty payment at the rate applicable if the inputs were manufactured in the factory. They asserted that the respondents, not an SSI unit, were not entitled to concessional duty, citing a notification. They distinguished a precedent involving input classification, emphasizing that the inputs were not manufactured in the factory. The Tribunal agreed with the Department's interpretation of Rule 57F(1)(ii), considering the subsequent notification inapplicable to the case's timeline. Consequently, the impugned order was set aside, and the appeal was allowed.