1997 (4) TMI 262 - AT - Central Excise

Summary

Issues:
1. Whether the mixtures of fluoron 11 and fluoron 12 were declared as final products.
2. Whether the provisions of Rule 57C apply to the case concerning the Modvat credit on inputs used in the manufacture of fluoron 11 and fluoron 12.

Analysis:

Issue 1:
The appeal challenged the order of the Collector (Appeals) confirming a demand of Rs. 5,20,383/-, alleging that the appellants did not declare fluoron 11 and fluoron 12 used in the manufacture of a mixture of chlorofluro hydrocarbons of methane. The appellants contended that fluoron 11 and 12 were intermediate products for the mixtures and thus entitled to Modvat credit. The Collector held fluoron 11 and 12 as final products. The Tribunal found that the mixtures of fluoron 11 and 12 were declared by the appellants, as they classified these hydrocarbons under sub-heading 29.10. The mixtures were considered chlorofluro hydrocarbons, thus declared by the appellants.

Issue 2:
Regarding the applicability of Rule 57C, it was argued that fluoron 11 and 12 were exempt under Notification No. 217/86 when captively consumed. Rule 57D allows credit on inputs even if intermediate products are exempt, provided they are used in the final product within the factory. The Tribunal found that fluoron 11 and 12 were used captively, cleared on duty payment, and considered intermediate products for the mixtures. Therefore, Rule 57C did not apply. The inputs declared for chlorofluro hydrocarbons were deemed inputs for the mixtures as no additional substances were used. The Tribunal relied on a previous judgment to support the appellants' case, holding that Modvat credit on inputs was admissible for the mixtures of fluoron 11 and 12. Thus, the appeal was allowed, setting aside the impugned order.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each issue, preserving the legal terminology and key arguments presented by both sides.