1999 (11) TMI 224 - AT - Central Excise

Waste and scrap of floor coverings of PVC entitled for benefit of Notification No. 53/88-C.E.

Summary

Issues:
- Availability of benefit under Notification No. 53/88 for waste and scrap of floor coverings of PVC
- Availment of Modvat credit under Rule 57A of Central Excise Rules

Issue 1: Availability of benefit under Notification No. 53/88 for waste and scrap of floor coverings of PVC:
The case involved two appeals, one by a company and the other by the department, regarding the availability of benefits under Notification No. 53/88 for waste and scrap of floor coverings of PVC. The company claimed the benefit based on the notification, while the department issued a show cause notice disallowing the benefit and demanding duty payment for a specific period. The company's advocate argued that a 'nil' rate of duty should be considered as appropriate duty paid, citing precedents like Tata Yodogawa Limited v. Union of India. The advocate contended that the benefit of the notification cannot be denied, and the duty paid character of inputs remains intact even when Modvat credit is availed. The department, represented by the ld. DR, emphasized that the DEEC notification, exempting duty on imported raw material, was conditional and different from general notifications. The Tribunal, after considering both sides' submissions, agreed with the company's contentions. It held that a 'nil' rate of duty should be considered appropriate duty paid, following precedents and rejecting the department's arguments regarding the DEEC notification.

Issue 2: Availment of Modvat credit under Rule 57A of Central Excise Rules:
Regarding the availment of Modvat credit under Rule 57A of the Central Excise Rules, the company's advocate argued that the duty paid character of inputs remains unaffected even when Modvat credit is utilized. The Tribunal, citing previous decisions like Metrosyl, Jesidih Industrial Area v. Collector of Central Excise, agreed with the advocate's contentions. It held that the availment of Modvat credit does not take away the duty paid character of inputs. Based on this reasoning and the precedents relied upon by the company, the Tribunal allowed the appeal filed by the company and rejected the appeal filed by the Revenue. The judgment provided for consequential relief, if any, as a result of the decision in favor of the company.