1999 (4) TMI 227 - AT - Central Excise

Summary

Issues:
Departmental appeal against Modvat credit allowed by Commissioner of Central Excise (Appeals) for certain inputs - Non-filing of declaration under Rule 57G for T.D. Alcohol - Disallowance of transitional Modvat credit - Assessee's plea of Modvat credit utilization and payment of duty in finished product - Dispute over credit availed for T.D. Alcohol and Plastic Container - Commissioner's findings on declaration filed by assessee - Department's appeal against Commissioner's decision.

Analysis:
The case involved a departmental appeal challenging the decision of the Commissioner of Central Excise (Appeals) allowing Modvat credit for inputs purchased by the assessee. The assessee, engaged in manufacturing various products falling under different sub-headings, availed Modvat credit under Rule 57A and SSI exemption. The dispute arose regarding the non-filing of a declaration under Rule 57G for T.D. Alcohol, leading to a show cause notice disallowing transitional Modvat credit. The assessing authorities considered the plea of the assessee regarding Modvat credit utilization and payment of duty in the finished product. The adjudicating authority initially disallowed the credit for T.D. Alcohol and Plastic Container, which was upheld by the Assistant Commissioner but overturned by the Commissioner of Central Excise (Appeals) based on the declaration filed by the assessee.

The Commissioner found that the assessee had declared a large number of final products and inputs in the filed declaration, including Emulsifier and HDPE Barrels or Carbouys. The department did not dispute that the inputs had suffered duty and were utilized in the manufacture of the final product. Citing the case law of Pawan Tyres Ltd. v. C.C.E., where a similar situation with multiple rubber chemicals was considered, the Commissioner concluded that there was substantial compliance with the Modvat scheme. The Commissioner dismissed the department's appeal, emphasizing that Modvat credit cannot be denied when inputs are generally described, especially in cases involving a variety of items like rubber chemicals.

In response to the grounds raised by the JDR for the department, the Commissioner considered the orders passed and the declaration filed by the assessee. The Commissioner's decision was based on the substantial compliance of the Modvat scheme by the assessee, as evidenced by the declaration indicating the purchase of inputs and payment of duty. Ultimately, the Commissioner dismissed the department's appeal, disagreeing with the submissions made by the DR and upholding the allowance of Modvat credit for the assessee.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the final decision rendered by the Commissioner of Central Excise (Appeals) in favor of the assessee regarding the Modvat credit dispute.