1999 (10) TMI 325 - AT - Central Excise

Summary

Issues: Interpretation of exclusion clause under Rule 57A for Modvat credit eligibility for HDPE bags/sacks during a specific period.

Analysis:
1. The Revenue filed a reference petition challenging the Tribunal's final order regarding the eligibility of HDPE bags/sacks for Modvat credit during a specific period. The dispute centered around whether items excluded from the category of input in Rule 57A could still be eligible for Modvat credit during the relevant period.

2. The Tribunal's decision was based on the interpretation of the exclusion clause under Rule 57A in relation to HDPE bags and sacks. The appellants argued that HDPE bags did not fall under the exclusion clause and were eligible for Modvat credit. They cited a previous decision and contended that HDPE bags used in cement packaging were eligible for Modvat credit. The Tribunal upheld the appellants' contention, stating that HDPE bags used as packaging in cement manufacturing were indeed eligible for Modvat credit.

3. The application for reference raised the argument that HDPE bags were excluded from Modvat credit eligibility during the relevant period due to the specific wording of the exclusion clause. The Revenue contended that HDPE bags made from strip/tapes of plastics were also covered by the exclusion clause, contrary to the appellants' claim. The Revenue highlighted the temporal aspect, stating that the exclusion clause came into effect before the relevant period, making HDPE bags ineligible for Modvat credit.

4. The Respondent's consultant mentioned that the issue had been extensively argued before the Tribunal and was settled through various decisions in different forums.

5. The Tribunal allowed the reference application, considering that the period in question coincided with the exclusion of HDPE bags/sacks from the list of inputs eligible for Modvat credit under Rule 57A. The case was referred to the High Court to decide on the interpretation of the exclusion clause and the eligibility of HDPE bags/sacks for Modvat credit during the specified period.