2000 (7) TMI 471 - AT - Central Excise

CEGAT Upholds Duty Demands on Pump Parts Manufacturing; Modvat Credit Allowed if Admissible.

The Appellate Tribunal CEGAT, New Delhi rejected the appeals by M/s. Kamla Castings and M/s. Pyare Lal Rameshwar Prashad related to duty demands on pump ... Demand of excise duty despite approved classification lists - classification under Notification No. 54/93-C.E. - effect of retrospective amendment on limitation and reassessment (Finance Act, 2000 and amendment to Section 11A) - Modvat credit admissibility subject to verificationDemand of excise duty despite approved classification lists - classification under Notification No. 54/93-C.E. - effect of retrospective amendment on limitation and reassessment (Finance Act, 2000 and amendment to Section 11A) - Whether the demands of duty raised against the appellants, though their classification lists were earlier approved and they claimed exemption under Notification No. 54/93-C.E., are sustainable - HELD THAT: - The Tribunal considered the appellants' claim that their approved classification lists and prior approvals precluded the demand. Reference was made to earlier Tribunal and Supreme Court decisions relied upon by the appellants. The Revenue pointed to amendments in the Finance Act, 2000 (including amendment to Section 11A) and Section 21 thereof, which give retrospective effect and enable recovery of duty where duty was not levied or paid notwithstanding any prior approval or acceptance, within the prescribed period. Applying these amended provisions and on the material before it, the Tribunal found the matter covered against the appellants and upheld the demand confirmed by the Collector (Appeals). [Paras 5]Demands of duty confirmed by the authorities are upheld and the appeals are rejected on merits.Modvat credit admissibility subject to verification - Whether the appellants are entitled to Modvat credit in respect of inputs for which credit was reversed when final products were cleared under exemption - HELD THAT: - The Tribunal accepted the contention that reversal of Modvat credit had been effected when the appellants cleared goods under exemption and noted the appellants' submission that, if duty is now held payable on final products, Modvat credit should not be denied solely because the benefit was not claimed at the time of clearance under exemption. The Tribunal directed that Modvat credit, if otherwise admissible, should not be denied on that sole ground and left the admissibility to verification by the appropriate authority. [Paras 5]Modvat credit is not to be denied only on the ground that it was not claimed at the time of exempted clearance; admissibility is to be verified and determined by the authorities.Final Conclusion: Appeals dismissed on merits with demands of duty sustained; Modvat credit permitted in principle subject to verification of admissibility by the assessing authority. The Appellate Tribunal CEGAT, New Delhi heard two appeals by M/s. Kamla Castings and M/s. Pyare Lal Rameshwar Prashad against a common order-in-appeal. The Collector of Central Excise had confirmed duty demands against the appellants related to pump parts manufacturing. The appellants claimed their classification lists were approved and cited previous tribunal decisions. The tribunal rejected the appeals, stating the matter was already decided against the appellants, but allowed Modvat credit if admissible.