1999 (12) TMI 313 - AT - Central Excise

Summary

Issues involved:
1. Availability of benefit under notification No. 339/86 for disposable syringes manufactured by M/s. Surgi Plast Ltd.
2. Eligibility for Modvat credit under Rule 57H of the Central Excise Rules.

Analysis:

Issue 1: Availability of benefit under notification No. 339/86
The appeal filed by M/s. Surgi Plast Ltd. questioned whether the disposable syringes they manufactured were eligible for the benefit of notification No. 339/86 dated 11-6-1986. The Departmental Representative argued that the syringes did not qualify as disposable or non-disposable Canula as specified in the notification. The contention was supported by the definition of canula as per New Lexicon Webster's Dictionary. The Tribunal noted that the notification exempted only specific types of canula for veins and blood vessels, excluding disposable syringes. Consequently, the benefit of the notification was rightly denied to the appellants.

Issue 2: Eligibility for Modvat credit under Rule 57H
Regarding the availability of Modvat credit, the Collector (Appeals) had ruled that transitional Modvat credit could only be claimed for inputs received before the acknowledgment date and available for verification. The appellants had not submitted the required certificate from the Director General of Health Services within the stipulated timeframe, leading to show cause notices for duty payment. However, the Tribunal emphasized that Modvat credit should not be denied solely due to the absence of a declaration when the finished product was initially considered duty-exempt. The appellants were deemed eligible for Modvat credit, provided they demonstrated the availability of input stock to the Assistant Commissioner and verified the duty paid nature. Consequently, the appeal was rejected, affirming the appellants' eligibility for Modvat credit subject to the specified conditions.

In conclusion, the judgment clarified the ineligibility of disposable syringes for the benefit of a specific notification and upheld the appellants' entitlement to Modvat credit under Rule 57H, subject to fulfilling verification requirements.