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of <h1>Appeal Granted: Modvat credit allowed for manufacturing process without duty evasion</h1> The Tribunal allowed the appeal, overturning the Assistant Collector and Commissioner's orders, determining that the appellants' process constituted ... Manufacture - Modvat Issues involved: Central Excise Duty classification, manufacturing process determination, validity of registration certificate, cancellation of registration, recovery of amounts under Rule 57-I, denial of Modvat credit, appeal against Commissioner's order.Central Excise Duty Classification: The appellants procured ferrous scrap, compressed it into bales after removing impurities, and sold it. Central Excise Authorities considered this a manufacturing process and directed levy under the Central Excise Act, 1944.Validity of Registration Certificate: The appellants obtained a registration certificate covering manufacturing and wholesale trading activities. Show Cause Notices were issued questioning the manufacturing process and the validity of the registration.Cancellation of Registration: The Assistant Collector ordered the surrender of the registration, rejection of Modvat declaration, and confirmed demands under Rule 57-I, totaling Rs. 23,44,874.Appeal Against Commissioner's Order: The Commissioner rejected the appeal, stating that the Assistant Collector's order did not warrant interference. The appellants challenged this decision.Manufacturing Process Determination: The appellants argued that their process involved removing impurities from scrap, resulting in a new commercial product. However, the Commissioner held that no new identifiable product emerged, and the scrap remained unchanged, not constituting manufacturing.Denial of Modvat Credit: The appellants contended that they were eligible for Modvat credit and had not evaded any duties by availing credit. The Tribunal found no reason to deny the credit availed.Judgment: The Tribunal set aside the lower authorities' orders, allowing the appeal based on the finding that the process undertaken by the appellants constituted manufacturing, making them eligible for Modvat credit and no duty evasion was found.
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