1999 (6) TMI 298 - AT - Central Excise

Summary

Issues:
1. Classification of glass and metal seals/stem and multiform sintered glass rods
2. Availability of Modvat credit on HIP granules used for the manufacture of HIP trays for packing electronic products

Issue 1: Classification of Glass and Metal Seals/Stem and Multiform Sintered Glass Rods
The appeal contested the classification under Heading 8540.90 (appellants) or Heading 7008.90 (Revenue) for specific products. The duty amount confirmed was Rs. 3,40,38,411.19 for the period from 1-1-1991 to 28-2-1994. The advocate argued that the demand was time-barred as relevant information was not suppressed intentionally. The classification lists submitted by the appellants since 1988 described the products as parts of electron guns. The advocate referenced previous tribunal decisions to support the classification under sub-heading 8544.90 for electron gun parts. The tribunal found the demand unjustified due to the early declaration of the products' use in manufacturing cathode ray tubes, ruling the demand time-barred.

Issue 2: Availability of Modvat Credit on HIP Granules
Regarding Modvat credit denial on HIP granules, the advocate acknowledged the initial lack of declaration under Rule 57G for plastic trays but later compliance. Citing a previous case, the advocate argued that Modvat credit denial was unwarranted. The tribunal, however, held that Rule 57G requirements are mandatory and cannot be waived, upholding the Modvat credit denial. The tribunal set aside the duty demand but upheld the Modvat credit recovery under Rule 57(I) as legally sound.

In conclusion, the tribunal partially allowed the appeal by reducing the penalty to Rs. 10,000 due to the time-barred nature of the major duty demand. The duty demand under proviso to Section 11A was set aside, while the Modvat credit recovery under Rule 57(I) was upheld. The judgment carefully analyzed the issues of classification and Modvat credit availability, emphasizing compliance with legal provisions and past tribunal decisions to reach a fair and reasoned decision.