1998 (1) TMI 205 - AT - Central Excise

Dismissal of refund claim appeal by Tribunal for duty paid copper wire rods & waste scrap clearance.

The appeal filed by M/s. Shri Shreyans Industries against the rejection of their refund claim related to duty paid copper wire rods and waste and scrap ... Modvat Issues:Appeal against order-in-appeal on duty paid copper wire rods, Modvat credit, waste and scrap clearance at nil rate of duty, rejection of refund claim.Analysis:The appeal was filed by M/s. Shri Shreyans Industries against the order-in-appeal dated 31-5-1990 passed by the Collector (Appeals), C. Ex., Bombay. The appellants were involved in the manufacture of super-enamelled copper winding wires falling under Heading No. 85.44 of the new Central Excise Tariff. They had taken Modvat credit on duty paid copper wire rods and cleared waste and scrap of copper at nil rate of duty under Notification No. 172/84-C.E. The issue arose when it was observed that the appellants had taken Modvat credit on inputs, making them ineligible for nil rate of duty on waste and scrap. The appellants debited the duty in RG 23A Part II Account upon objection and later filed a refund claim which was rejected based on the payment of duty according to the approved classification list.Upon review of the case, it was found that the appellants had shown the rate of duty on waste and scrap of copper in the classification list approved by the proper officer. Although nil rate of duty was mentioned for scrap and waste of copper, it was specified that credit of the input would not be taken. However, the appellants had already taken credit of the input duty for the disputed goods but still removed waste and scrap at nil rate of duty. The jurisdictional Superintendent demanded central excise duty, which the appellants paid by reversing the credit through RG 23A Part II Account.The Tribunal considered the provisions of Notification No. 172/84-C.E. and the amended Notification No. 246/87-C.E. It was noted that waste and scrap of copper were exempt from duty if manufactured from goods on which duty had been paid. The appellants had availed Modvat credit but removed waste and scrap at nil rate of duty. The appellants argued that under the amended notification, exemption to waste and scrap was available only if no credit was taken on the inputs generating such scrap. The Tribunal emphasized that waste and scrap were excisable and dutiable, and the Modvat scheme had specific provisions for clearance of waste and scrap from inputs with taken credit. Despite the appellants' actions to reverse the credit upon objection, the Tribunal held that the amended notification could not solely justify a refund claim when assessments were based on the approved classification list and regularized by credit reversal.The total amount involved in the proceedings was Rs. 19,149.75. After considering all relevant facts, the Tribunal found no reason to interfere with the lower authorities' findings. Consequently, the appeal was dismissed for lack of merit.