2002 (9) TMI 244 - AT - Central Excise

Summary

Issues involved: Interpretation of Central Excise Rules regarding Modvat credit and exemption notification, validity of Board's circular, applicability of Section 11AB on interest payable.

Interpretation of Central Excise Rules regarding Modvat credit and exemption notification:
The appellants manufactured yarn and fabrics, paying duty on yarn despite exemption notification for captive consumption of fabrics. The Assistant Commissioner disallowed Modvat credit citing a Supreme Court judgment and the permission secured under Rule 49A. The Commissioner (Appeals) found the credit valid based on invoices issued in the appellants' name, contrary to a Board circular. The Tribunal, following the Everest Converters case, upheld the appellants' right to choose to avail exemption benefits or pay duty, rejecting the Board's circular.

Validity of Board's circular:
The Tribunal found no validity in the Board's circular, as per the Everest Converters case and subsequent judgments, affirming the appellants' right to choose regarding exemption benefits and duty payment.

Applicability of Section 11AB on interest payable:
The Tribunal noted that discussions on Section 11AB did not arise from the show cause notice or the original order, leading to the appeal being allowed based on the settled issue.