1999 (8) TMI 213 - AT - Central Excise

Summary

Issues:
Deemed Modvat credit disallowed on grounds of old scrap classification and lack of documentation.

Analysis:
1. The first issue pertains to the denial of credit for deemed Modvat on the basis that old railway scrap does not qualify as rolled/re-rollable material and is not clearly recognized as duty paid. The appellant argued citing a precedent that the government order does not impose such conditions. The Tribunal's decision in Ravi Steels case supported the appellant's position. The judge concurred, allowing the deemed credit of Rs. 47,538.

2. The second issue concerns the denial of credit due to inadequate documentation and timing of input receipt in relation to the declaration filing date. The appellant contended that the inputs were received before the declaration filing date and referenced a Tribunal decision in Sri Jaya Steels case to support their argument. The Department argued that evidence of duty payment before declaration filing is necessary, citing Forge Products Ltd. case. However, the judge found merit in the appellant's argument, ruling that the inputs were available before the declaration date, and the lack of correlation was justified due to the nature of the scrap material and explained non-utilization of the quantity in manufacturing final products.

In conclusion, the judge allowed the appeal, granting the appellants the deemed credit in full and overturning the impugned order. The decision was based on the interpretation of relevant laws, precedents, and the satisfactory explanations provided by the appellants regarding the issues raised by the Department.