2000 (4) TMI 399 - AT - Central Excise

Summary

Issues:
- Challenge to demand raised under Rule 57-I for duty amount
- Proper utilization of Modvat credit for clearance of Aluminium articles

Analysis:
1. Challenge to demand raised under Rule 57-I for duty amount:
The appeal was against an Order-in-Appeal that upheld the demand for duty amount under Rule 57-I. The original authority had required requantification of amounts related to the utilization of Modvat credit. The appellant contested the basis of the demand, specifically regarding the utilization of Modvat credit against inputs for the clearance of Aluminium articles instead of Calcined Alumina. The Revenue argued that the utilization was in contravention of Rule 57F(3) as Calcined Alumina and Aluminium were considered different products.

2. Proper utilization of Modvat credit for clearance of Aluminium articles:
The appellant argued that Calcined Alumina and Aluminium were products of the same family, with Calcined Alumina being an intermediary product in the manufacture of Aluminium. They maintained a common RG-23A for Modvat purposes despite separate licenses for Calcined Alumina and Aluminium. The appellant contended that the word "similar" in Rule 57F(3) should be interpreted broadly to include goods falling within the same class or category. They cited various tribunal decisions supporting this interpretation, emphasizing that a one-to-one correlation between input and final product was not required. The tribunal agreed with this interpretation, stating that since Calcined Alumina and Aluminium fell within the same broad class of products, the Modvat credit utilization was valid. The tribunal set aside the impugned order and allowed the appeal with consequential relief.

This detailed analysis of the legal judgment highlights the issues involved and the arguments presented by both parties, leading to the tribunal's decision on the proper utilization of Modvat credit for the clearance of Aluminium articles.