1995 (7) TMI 152 - AT - Central Excise

Condonation of Appeal Delay & Duty Waiver for Small Manufacturer Upheld

The Tribunal granted condonation of technical delay in filing the appeal and waiver of pre-deposit of duty pending appeal for a small-scale manufacturer ... Modvat credit and S.S.I. Exemption Issues:1. Condonation of technical delay in filing the appeal.2. Stay petition for waiver of pre-deposit of duty.3. Interpretation of Notification 175/86 regarding Modvat Credit for branded goods.Condonation of Technical Delay:The judgment addresses the technical delay in filing the appeal and condones it based on the reasons stated in the petitions. The order is per S. Kalyanam, Vice President of the Tribunal.Stay Petition for Waiver of Pre-deposit of Duty:The petitioner, a small-scale manufacturer of branded goods, filed a Stay petition seeking waiver of pre-deposit of a duty amount levied under the original order of the AC Tanjore and confirmed in appeal by the Collector (Appeals), Trichy. The petitioner clears branded goods under the brand name 'NUTRINE' and their own brand 'EXCEL,' availing Modvat Credit for 'NUTRINE' but claiming exemption for 'EXCEL.' The authorities rejected the petitioner's claim based on Modvat Credit availed for 'NUTRINE.' The Tribunal, after considering submissions and records, finds the petitioner's contention well-founded, citing a circular by the Central Board permitting Modvat credit for exported goods even if full exemption is availed for goods cleared for home consumption under Notification 175/86. Consequently, the Tribunal grants waiver of pre-deposit of duty pending appeal due to the petitioner not availing Modvat Credit for their own branded goods.Interpretation of Notification 175/86 on Modvat Credit:The Tribunal examined the circular issued by the Central Board clarifying the position on Modvat Credit for small-scale units availing full exemption under Notification 175/86 for goods cleared for home consumption. The circular allows small-scale units to avail Modvat credit on inputs used for exported goods even if full exemption is claimed for goods cleared for home consumption. The Tribunal emphasized that if the assessee maintains separate accounts for export and home consumption production, they can take credit of duty paid on inputs for exported goods and use it for payment of duty on similar products after crossing the exemption limit or claim a refund as per Rule 57F(3). Based on this interpretation and the fact that the petitioner did not avail Modvat Credit for their own branded goods, the Tribunal granted the waiver of pre-deposit of duty pending appeal.