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of <h1>Tribunal ruling on Modvat credit, SSI exemption, and duty calculation for damaged parts</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, INDORE Versus SCIENTIFIC SALES</h3> The Tribunal allowed the Revenue's appeal regarding the disallowance of Modvat credit for damaged Cathode Ray Tubes, stating the damaged tubes were not ... Cenvat/Modvat - SSI Exemption - Brand name - Demand - Clandestine removal Issues:1. Modvat credit disallowance for damaged Cathode Ray Tubes2. Duty calculation for parts of Oscilloscope used for repair3. Denial of Small Scale Industry (SSI) exemption based on brand name4. Clearance of instruments for testing without proper documentation5. Duty calculation for parts of Oscilloscope cleared by a companyIssue 1: Modvat credit disallowance for damaged Cathode Ray TubesThe Revenue appealed against the Orders-in-Appeal disallowing Modvat credit for damaged Cathode Ray Tubes. The Additional Commissioner disallowed the credit, stating the tubes were not used in manufacturing final products. The Commissioner (Appeals) allowed the credit under Rule 57D(2) of the Central Excise Rules, noting the tubes were damaged during testing, which is part of the manufacturing process. The Tribunal held that damaged tubes not used in manufacturing final products are not eligible for Modvat credit. Rule 57D applies only to inputs in waste arising during manufacture, which did not occur with the tubes. Thus, the Revenue's appeal was allowed in this regard.Issue 2: Duty calculation for parts of Oscilloscope used for repairThe Additional Commissioner confirmed duty demand for parts of Oscilloscope used in repair. The Commissioner (Appeals) adjusted the duty rate to 5% ad valorem for small scale industry exemption eligibility. The Tribunal agreed with the Revenue that duty should be the amount of credit availed under Rule 57A when inputs are removed as such. Therefore, the duty calculation was upheld based on the credit availed for repairing instruments.Issue 3: Denial of SSI exemption based on brand nameThe Revenue contended denial of SSI exemption due to affixing goods with a foreign company's brand 'HM.' The Commissioner (Appeals) allowed the benefit, noting 'HM' indicated the model of Oscilloscopes, not a brand name. The Tribunal agreed, stating 'HM' did not signify a brand name of another person. As the goods bore the brand name 'Scientific,' the benefit of the SSI exemption was rightly granted.Issue 4: Clearance of instruments for testing without proper documentationAllegations were made against the clearance of instruments for testing without evidence of return by one company and removal without accounting or duty payment by another. The Tribunal remanded this aspect for re-examination by the Adjudicating Authority to consider all material and provide a fair hearing to both companies.Issue 5: Duty calculation for parts of Oscilloscope cleared by a companyThe Commissioner (Appeals) found the company eligible for SSI exemption, adjusting the duty rate to 5% ad valorem. The Revenue did not challenge this finding, leading to the Tribunal upholding the extension of the SSI Notification benefit. Both appeals were disposed of accordingly.
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