2017 (2) TMI 828 - AT - Central Excise

Appeal granted for Modvat credit denial on Ferro Silicon Calcium Cored Wire

M/s. Minex Metallurgical Co. Ltd Versus Commissioner of Central Excise, Napgpur -I Div.

M/s. Minex Metallurgical Co. Ltd Versus Commissioner of Central Excise, Napgpur -I Div. - TMI Issues:1. Denial of Modvat credit for Ferro Silicon Calcium Cored Wire.2. Requirement of filing declaration under Rule 57G.3. Compliance with modvat credit rules.4. Interpretation of input and final product.Analysis:1. The appellant availed Modvat credit for Ferro Silicon Calcium Cored Wire, previously cleared as finished goods. The adjudicating authority denied credit, stating it was not an input and lacked a 57G declaration. The Commissioner(Appeals) upheld this decision, leading to the appeal.2. The appellant argued that defective returned goods could be used in fresh manufacturing, making them eligible as inputs under Rule 57-G. They declared Ferro Silicon Calcium as input and Ferro Silicon Calcium Cored Wire as final product under the same chapter heading. Despite a declaration discrepancy, the appellant cited Board Circular No. 263/45/89-C&B to support credit entitlement, along with relevant case laws.3. The Revenue contended that the 57G declaration was mandatory, and non-compliance violated modvat credit rules, justifying the credit denial. They referenced a judgment to support their stance.4. The Tribunal acknowledged the appellant's declaration aligning input and final product under the same chapter. They deemed it sufficient for Rule 57G compliance, noting the Circular's relaxation due to procedural lapses. Case laws cited by the appellant favored their position, establishing that defective goods for reuse qualify as inputs. Despite a declaration error, the goods fell under the correct chapter, warranting credit approval. Consequently, the impugned order was set aside, and the appeal was allowed.