1996 (3) TMI 291 - AT - Central Excise

Appellate Tribunal decision: Modvat Credit allowed for Connecting Rod; Electric Motor claim accepted after technical rectification.

The Appellate Tribunal rejected the Modvat Credit claim for the DC Electric Motor but allowed the claim for the Connecting Rod. The issue of Mandral was ... Modvat Issues:1. Denial of Modvat Credit for DC Electric Motor, Connecting Rod, Mandral, and Electric Motor.Analysis:The appeal before the Appellate Tribunal arose from an order-in-appeal dated 12-10-1993, confirming the Assistant Collector's decision to deny Modvat Credit for 4 items, resulting in demands of Rs. 99,245.86. The appellants, engaged in manufacturing parts falling under specific chapters of the Central Excise Tariff Act, 1985, availed the Modvat Scheme for goods received, including DC Electric Motor, Connecting Rod, and Mandral. The department contended that the appellants failed to declare these inputs under Rule 57G of the Central Excise Rules, 1944, leading to the denial of Modvat Credit. Issues arose concerning the classification and declaration of these inputs, specifically related to gate passes and declarations filed by the appellants.The appellants argued that the DC Electric Motor was part of an assembly declared under a different sub-heading, thus justifying Modvat Credit. They also contended that the Connecting Rod was covered under the declaration for forging and bar stock, despite no separate declaration for it. Regarding the Mandral, the appellants claimed a technical lapse in the gate pass endorsement, citing precedent to support their position. The denial of Modvat Credit for an Electric Motor was challenged due to a technical error in the gate pass referencing a non-existent company, which was later rectified by the supplier's certificate.After considering both parties' submissions, the Tribunal found that no declaration was filed for the DC Electric Motor, leading to a justified denial of Modvat Credit for this item. However, the Tribunal accepted the appellants' argument regarding the Connecting Rod, granting Modvat Credit based on the declaration for forging and bar stock. The issue of Mandral was remanded to rectify the technical defect in the gate pass endorsement. Similarly, the Tribunal allowed Modvat Credit for the Electric Motor due to a technical error in the gate pass, supported by the supplier's certificate correcting the appellant's name.In conclusion, the Tribunal rejected the Modvat Credit claim for the DC Electric Motor, allowed the claim for the Connecting Rod, remanded the Mandral claim for rectification, and permitted the claim for the Electric Motor. The appeal was disposed of accordingly, addressing each item's Modvat Credit eligibility based on the specific arguments and evidence presented during the proceedings.