1997 (3) TMI 302 - AT - Central Excise

Issues:
Calculation of aggregate value of clearances under Notification No. 175/86-C.E. for steel wires. Interpretation of exemption under Notification No. 175/86-C.E. regarding duty paid wire rods and galvanized iron wires. Reversal of credit for duty paid wire rods under Notification No. 208/83-C.E. Applicability of Supreme Court decision in Chandrapur Magnet Wires Ltd. v. Collector of Central Excise, Nagpur. Exemption criteria under Notification No. 208/83-C.E. for galvanized iron wires and metal steel wires made from duty paid wire rods. Interpretation of taking credit on duty paid inputs and exemption eligibility. Comparison of facts with Chandrapur Magnet Wires Pvt. Ltd. case. Dispute over whether clearance of wires constitutes reversal of credit or payment of duty. Consideration of exemption conditions and Modvat credit availed for raw materials.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the calculation of the aggregate value of clearances under Notification No. 175/86-C.E. for steel wires by M/s. Triveni Forgings & Ispat Udyog. The issue revolved around whether the wires made from duty paid wire rods were exempted from Central Excise duty under Notification No. 208/83-C.E. The appellants contended that the clearance of wires constituted a reversal of credit as the wires were exempted goods. However, the Revenue argued that the clearance of wires entailed the payment of duty and thus the value of clearances should be considered for exemption eligibility under Notification No. 175/86-C.E.

During the proceedings, Shri V. Sridharan, Advocate for the appellant, cited the Supreme Court decision in Chandrapur Magnet Wires Ltd. case to support the contention that the credit was reversed when the wires were cleared under exemption Notification No. 208/83-C.E. On the other hand, Shri A.K. Agarwal, SDR for the respondent, highlighted the difference in facts between the present case and the Chandrapur Magnet Wires Pvt. Ltd. case, emphasizing that the wires had been cleared on payment of duty.

The Tribunal analyzed the exemption under Notification No. 208/83-C.E. for galvanized iron wires and metal steel wires made from duty paid wire rods. Referring to the Supreme Court decision in Chandrapur Magnet Wires Pvt. Ltd. case, the Tribunal emphasized the requirement to make a debit entry in the credit account before removal of the exempted final product. The Tribunal concluded that the wires were exempted from duty under the notification, and the value of clearances should not be considered for the purpose of Notification No. 175/86-C.E. despite the Modvat credit availed for raw materials.

Ultimately, the Tribunal disagreed with the view of the Collector of Central Excise, Nagpur, and allowed the appeal, holding that after the reversal of the credit, the wires were deemed exempt from duty under Notification No. 208/83-C.E. The Tribunal found that the intention was not to charge duty twice on the wire rods and the wires, aligning with the interpretation of the exemption criteria and the applicability of the Supreme Court decision in similar circumstances.

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