2002 (5) TMI 188

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....alling under Tariff Heading No. 7307, 7326 & 7207 respectively. They availed Modvat credit of Rs. 18,026/-. On the strength of invoice No. 490033, dated 13-11-1997 issued by M/s. BHEL, Ramachandra, Hyderabad on the item weld neck flanges. They were however issued a show cause notice by the Superintendent of Central Excise, MOR 15, Central Excise, New Delhi in which it was alleged that the item wel....

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.... The appellants pleaded before the lower appellate authority that the Modvat credit is admissible on the duty paid rejected products, which are used for the manufacture of such goods. In this they relied on the decision of the Tribunal in the case of M/s. Alcobex Metals Ltd. v. CCE - 1993 (68) E.L.T. 146 (T). The party further submitted that such rejected duty paid goods were resold by them after ....

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....hem and they are taking the Modvat credit of duty paid on such rejected goods. The appellants are contending that they are subjecting such returned goods to further tests and inspection and clearing the same on payment of duty. Since there is no objection by the department subjecting the same goods to the payment of Central Excise duty again, the process of manufacture is inherent in such levy of ....