1999 (6) TMI 82 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit on MS scrap and steel scrap for re-rolling mill.
2. Interpretation of Rule 57G declaration for waste and scrap as inputs.
3. Application of Tribunal's decision on Modvat credit eligibility.

Analysis:
1. The Appellate Tribunal considered the issue of the admissibility of Modvat credit on MS scrap and steel scrap for a re-rolling mill. The respondents, engaged in manufacturing iron and steel products, availed Modvat credit on scrap falling under CET sub-heading 7204.90. The Tribunal noted that the scrap did not cover an article convertible into another by hot rolling, as per relevant tariff notes. The lower appellate authority initially allowed the appeals by the assessees, following a previous Tribunal decision. The Revenue appealed against this decision.

2. The Tribunal examined the interpretation of the Rule 57G declaration regarding waste and scrap as inputs for the respondents' re-rolling mill. The respondents had declared the scrap falling under CET sub-heading 7204.90 as an input for their final products. They clarified that the scrap received was used in their rolling mill operations, supported by their records. The Tribunal found the objection to extending credit baseless, as the inputs were indeed utilized in the manufacturing process, as per the Tribunal's previous ruling.

3. The Tribunal applied its earlier decision on Modvat credit eligibility to the present cases. The Tribunal emphasized that if the materials received by the appellants were re-rollable and used for re-rolling, the Modvat credit benefit could not be denied. As the respondents had demonstrated the use of inputs in the manufacture of final products through their records, the Tribunal upheld the lower appellate authority's order, rejecting the Revenue's appeals. The Tribunal concluded that the benefit of Modvat credit should not be denied when materials are re-rollable and satisfactorily used in the manufacturing process.