9911796707
TMI Blog1997 (10) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. - The appeal is directed against the order of the Commissioner of Central Excise & Customs (Appeals), Pune captioned above. The appellants manufacture Nuts and Bolts, they supplied certain quantities of bolts to a customer M/s. Kirloskar. These were rejected and returned by the customer because on defects and the customers sent it back to the appellants on payment of duty thereon, as if it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps which were later on cleared, after re-sizing were eligible for Modvat credit. 3. Shri D. Gurnani the ld. JDR contended that there are two decisions of the Tribunal contra in the case of Bharat Gears v. Commissioner of Central Excise, Mumbai - 1996 (87) E.L.T. 668 (Tribunal) and in the case of ICI India Ltd. v. Commissioner of Central Excise, Calcutta - 1997 (89) E.L.T. 216 (Tribunal). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. This is provided for under Rule 57F(1). In such a situation therefore the operation undertaken on the returned goods on the appellants factory is only removal of defects which does not amount to manufacture. The fundamental rule of Modvat credit is that it is given on the duty paid on inputs which are used in or in relation to the manufacture of finished product. When this element is absent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at credit on the returned defective goods to the appellants by the lower authorities is sustainable and it is upheld. However, the ld. Consultant has also pleaded that in any case the penalty on the appellant Rs. 1,000/- on the appellant is not justified. One is inclined to agree with this contention, because the matter revolves round a question of interpretation of Rule 57F(1). Therefore the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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