Modvat credit on ferrous scrap for remelting upheld despite different tariff classification of CTD cuttings.

Modvat credit was admissible on CTD end cuttings and CTD bar cuttings declared as ferrous waste and scrap for remelting, even though they were classified under a different tariff heading. The decisive factor was that the inputs were received only for melting, not rerolling, and the declaration covered ferrous metal scrap intended for remelting. As the cuttings were fit only for melting and fell within the scope of the declaration under the Rule 57A notification, their specific tariff classification did not defeat credit eligibility. The department's objection was therefore unsustainable, and the allowance of Modvat credit was upheld.

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Issues: Whether Modvat credit was admissible on CTD end cuttings and CTD bar cuttings declared as ferrous waste and scrap for remelting, despite their classification under a different tariff heading.

Analysis: The inputs were undisputedly received only for melting and not for rerolling. The declaration disclosed the intention to use ferrous metal scrap for remelting, and the tariff heading for such scrap had been mentioned in the declaration. Since the CTD cuttings were fit only for melting, they were eligible inputs under the notification issued under Rule 57A, irrespective of their specific classification, so long as they were covered by the declaration for ferrous scrap for remelting.

Conclusion: The objection of the department was not sustainable, and the allowance of Modvat credit was upheld.

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