2007 (8) TMI 624 - AT - Central Excise

Court rules in favor of assessee on lay flat tubings exemption & Modvat credit denial

The court rejected the Revenue's appeal regarding the exemption of lay flat tubings consumed in the manufacture of plastic cap covers before 3-12-97. It ... Plastic tubings - Lay flat tubings - Cenvat/Modvat - Plastic tubing Issues:1. Exemption of lay flat tubings consumed captively in the manufacture of plastic cap covers prior to 3-12-97.2. Denial of Modvat credit under Rule 57H for lay flat tubings.Analysis:Issue 1:The case involves the appeal by the Revenue against the order concerning the demand for lay flat tubings consumed captively in the manufacture of plastic cap covers before 3-12-97. The original adjudicating authority accepted the assessee's contention that the lay flat tubings were exempted under Notification No. 16/97 until 3-12-97. The Commissioner (Appeals) upheld this decision. The Tribunal referred to a similar case and held that the lay flat tubings were entitled to exemption until 3-12-97, and subsequent amendments would not be retrospective. Therefore, the demand for duty prior to 3-12-97 was not justified.Issue 2:Regarding the denial of Modvat credit under Rule 57H for lay flat tubings, the Jt. Additional Commissioner observed that the Revenue failed to provide substantial grounds to disprove the claim made by the assessee. The claim for Modvat credit had been previously examined and allowed under Rule 57H. The Revenue did not present any evidence to refute the claim, and the original adjudicating authority rightly noted that there was no basis to deny the credit. Consequently, the denial of Modvat credit was deemed unjustified.In conclusion, the appeal filed by the Revenue was rejected based on the above analysis, and the decision was pronounced in court on 8-8-2007.