1999 (3) TMI 278 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand under show cause notices for contravention of Rule 57F(1)(ii) of the Central Excise Rules.
2. Eligibility for Modvat credit on inputs used in manufacturing motor vehicles.
3. Applicability of Rule 57F(2) as an exception to Rule 57F(1).
4. Compliance with procedural requirements under Rule 57F(2).
5. Entitlement to facility under Rule 57F(2) despite payment of duty by manufacturers of fuel tanks and struts.

Issue 1:
The Commissioner of Central Excise confirmed a demand of Rs. 2,70,33,595/- under show cause notices for contravention of Rule 57F(1)(ii) of the Central Excise Rules, alleging that the appellants removed inputs to job workers without paying duty. The Commissioner held that the appellants were not covered by Rule 57F(2) as contended by them.

Issue 2:
The Tribunal considered the eligibility for Modvat credit on inputs used in manufacturing motor vehicles. The Tribunal referred to a previous order where it was held that Rule 57F(1)(ii) did not apply in cases where inputs were sent to job workers for further processing and returned to the principal manufacturer for use in the final product, as per a Trade Notice emphasizing such practices.

Issue 3:
Regarding the applicability of Rule 57F(2) as an exception to Rule 57F(1), the Tribunal noted that the appellants had requested general permission under Rule 57F(2) and had substantially complied with procedural requirements. The Tribunal rejected the adjudicating authority's reasoning for ruling out the applicability of Rule 57F(2) based on procedural lapses.

Issue 4:
The Tribunal addressed the compliance with procedural requirements under Rule 57F(2), finding that the appellants had substantially followed the procedural requirements, including requesting general permission under Rule 57F(2) and maintaining necessary documentation despite minor deviations.

Issue 5:
In response to the argument that manufacturers of fuel tanks and struts had paid duty instead of availing the benefit of a notification, the Tribunal rejected this contention based on previous decisions. It held that the appellants were entitled to the facility under Rule 57F(2) following the precedent set in earlier cases, leading to the setting aside of the impugned order and allowing the appeals based on the previous decision's ratio.

This detailed analysis of the judgment provides insights into the issues raised, the Tribunal's considerations, and the legal conclusions reached in each aspect of the case.