1994 (6) TMI 62 - AT - Central Excise

Tribunal remands case for reevaluation of Modvat eligibility criteria

JAIN KALIAWALA ENGG. WORKS PVT. LTD. Versus COLLECTOR OF C. EX., KANPUR

The Tribunal remanded the case for reevaluation by the Adjudicating Authority to verify gate passes, obtain certificates for consignments, and consider ... Modvat Credit - Duty-paid character Issues:1. Admissibility of Modvat credit on inputs used in manufacture of final products.2. Rejection of appeal by Collector (Appeals) due to non-declaration of steel rounds and absence of certificates.3. Disallowance of credit on consignments by Asstt. Collector.4. Verification of gate passes and certificates indicating duty-paid character of goods.5. Consideration of Tariff Item 7214.90 in the declaration for Modvat eligibility.Analysis:1. The appeal was filed against the Collector (Appeals) order rejecting the Modvat credit availed by the appellants on inputs used in manufacturing steel forgings. The Central Excise Officers found discrepancies in the availed credit as the invoices from Steel Authority of India Ltd. lacked a duty-paid certificate. Additionally, the appellants did not declare steel rounds under Rule 57A of Central Excise Rules, leading to a show cause notice demanding duty payment of Rs. 4,20,844.13.2. The appellants argued that some consignments were covered by gate passes, although seized by authorities, and certificates for consignments from SAIL Stockyard were later obtained. The Collector (Appeals) rejected their plea, citing non-submission of gate pass copies and certificates. It was contended that only a few consignments were steel rounds, classified under Tariff Item 7214.90, and relied on a relevant case law.3. The JDR confirmed that 69 gate passes matched the show cause notice annexure but highlighted the necessity of certificates for goods from Hindustan Steel Stockyard. The steel rounds' specific mention in the declaration was emphasized as well.4. After evaluating both parties' submissions, the Tribunal observed discrepancies in the consignments' origin and the duty-paid status. The Tribunal directed a reevaluation by the Adjudicating Authority to verify the gate passes, obtain certificates for consignments from Hindustan Steel Stockyard, and consider the relevance of Tariff Item 7214.90 for Modvat eligibility.5. The Tribunal concluded that the appellants should not be disqualified from Modvat benefits solely due to the omission of 'Steel rounds' in the declaration, given their classification under Heading 7214.90. The matter was remanded for a fresh assessment, emphasizing the verification of gate passes and certificates to ensure the proper allowance of credit where applicable.