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of <h1>Tribunal Upholds Decision on Modvat Credit for Cast Iron Scrap</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, PATNA Versus TEL FAB INDUS. (P) LTD.</h3> COMMISSIONER OF CENTRAL EXCISE, PATNA Versus TEL FAB INDUS. (P) LTD. - 2001 (132) E.L.T. 496 (Tri. - Kolkata) Issues: Appeal against Commissioner (Appeals) order regarding Modvat credit on waste and scrap of cast iron, interpretation of Rule 57F(18) and Rule 57F(3), challenge on dropping demand for captive consumption.Analysis:1. The case involved a dispute over Modvat credit availed by the respondent on waste and scrap of cast iron used in manufacturing ingot moulds. The Revenue contended that the respondent should pay back the credit at the time of clearing waste and scrap, as the duty paid was less than the credit taken. However, the Commissioner (Appeals) disagreed, stating that the waste arising from processing inputs was cleared correctly by the respondent under Rule 57F(18) by paying duty.2. The Revenue argued in their appeal memo that the respondent's actions were a way to avail excess credit by clearing waste and scrap on which credit was initially taken. They claimed that the waste cleared was not actual waste but a transfer of inputs from one register to another. However, after hearing the Revenue's submissions, it was found that the waste cleared by the respondent was indeed arising during the processing of inputs, as required by Rule 57F(18).3. The original adjudicating authority had also proposed a demand for duty on inputs used in manufacturing moulding boxes for captive consumption, which was later dropped. The Revenue, although not appealing against this decision earlier, challenged it in the present appeal. The Tribunal held that since no appeal was filed against the dropping of demand initially, the Revenue could not challenge it before the Tribunal.4. Ultimately, the Tribunal rejected the Revenue's appeal, upholding the Commissioner (Appeals) decision that the waste and scrap cleared by the respondent were in compliance with Rule 57F(18) as they arose during processing of inputs. The Tribunal also dismissed the Revenue's challenge on the dropping of demand for captive consumption, emphasizing the importance of following proper appeal procedures.
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