2003 (3) TMI 238 - AT - Central Excise

Manufacturing by-products eligible for Modvat credit under Rule 57A: Tribunal rules in favor of Hi-Tech Carbon

HI-TECH CARBON Versus COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD

The Tribunal held that the off-gases generated during the manufacturing process are a by-product, entitling M/s. Hi-Tech Carbon to Modvat credit under ... Cenvat/Modvat - By-product Issues involved: The issue involved in this Appeal is whether Modvat credit of duty paid on inputs, specifically Carbon Black Feed Stock (CBFS), is available to M/s. Hi-Tech Carbon under Rule 57A of the Central Excise Rules, 1944.Comprehensive Details:Issue 1: Modvat Credit EligibilityThe Appellants argued that the steam generated during the manufacturing process of Carbon Black, using off gases, qualifies as a by-product and thus they are eligible for Modvat credit. They cited relevant rules and previous tribunal decisions to support their claim. They also contended that the demand is time-barred due to lack of wilful misstatement or suppression of facts.Issue 2: Department's CounterargumentThe Department argued that the steam generated cannot be considered a by-product as it is a conscious activity undertaken by the Appellants. They referenced legal definitions and previous tribunal decisions to support their stance that the steam is a final product and not a by-product.Issue 3: Tribunal's DecisionAfter considering both arguments, the Tribunal found that the off-gases generated during the manufacturing process are indeed a by-product, as they are incidentally produced in the production of Carbon Black. The Tribunal referenced relevant rules and previous decisions to support their conclusion that the Modvat credit cannot be denied based on the generation of steam using off gases. They set aside the impugned Order and allowed the Appeal.This summary provides a detailed overview of the arguments presented by both parties and the Tribunal's decision regarding the eligibility of Modvat credit for M/s. Hi-Tech Carbon.