2002 (9) TMI 195 - AT - Central Excise

Summary

Issues involved: Appeal against Order-in-Appeal allowing appeal by assessee with consequential relief; confusion regarding nature of destroyed goods; Modvat credit reversal u/s Rule 57A; applicability of Rule 49 in case of fire accident; reliance on CEGAT decisions; dispute over input credit reversal.

Summary:
The appeal before the Appellate Tribunal CEGAT, Chennai was directed against the Order-in-Appeal allowing the appeal filed by the assessee, involving a checkered history with confusion over the nature of destroyed goods. The Tribunal had remanded the matter to clarify the goods' nature and examine Modvat credit reversal u/s Rule 57A. The case pertained to destruction of inputs in a fire accident by the manufacturers of electronic automatic exchanges. The Revenue contended that Modvat credit was not used as per Rule 57A. The Commissioner (Appeals) relied on precedents to hold that Rule 57D(1) applied due to goods becoming waste in the fire accident.

The Revenue appealed on grounds including Rule 49 inapplicability, Modvat credit utilization, and alleged misapplication of CEGAT decisions. The department sought to reverse the input credit taken by the assessee. The Tribunal considered the evidence and found that the goods were destroyed in a fire accident, rejecting the Revenue's contention on Rule 49 applicability. The Tribunal upheld the Commissioner (Appeals)' reliance on relevant case laws and concluded that there was no basis to reverse the input credit taken by the assessee.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)' decision based on the evidence and legal analysis. The Tribunal found no reason to interfere with the lower appellate authority's order, as there was no diversion of goods and the input credit reversal was deemed unwarranted in this case.