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1999 (4) TMI 275 - AT - Central Excise
Issues:
Admissibility of Modvat credit on Molybdenum wire. Detailed Analysis: 1. Background and Appeal: The appeals filed by the Revenue concern the admissibility of Modvat credit on Molybdenum wire. The Commissioner (Appeals) had allowed Modvat credit for the respondents based on previous Tribunal decisions. The Revenue, dissatisfied with this decision, filed two appeals which were consolidated due to the same issue. 2. Manufacturers' Position: The appellants, manufacturers of tungsten filament and Molybdenum wire, used the wire for captive consumption in making tungsten wire coils. The department alleged that Molybdenum wire fell under the exclusion category under Rule 57A as it was used as a support wire or tool. The assessees contended that Molybdenum wire did not qualify as a tool or appliance, citing previous Tribunal judgments, and thus, Modvat credit should be allowed. 3. Arguments by JDR: The JDR argued that Molybdenum wire was not an input eligible for Modvat credit as it was used as a core for winding tungsten wire, functioning as a tool or appliance. Referring to Rule 57A, it was claimed that the wire's specific use categorized it under the excluded inputs. The JDR requested the appeal to be allowed based on this argument. 4. Counsel's Submission: The counsel for the assessees highlighted that the department relied solely on a previous decision that was later considered bad law by subsequent Tribunal rulings. These subsequent judgments clarified that Molybdenum wire was an input, not a tool or appliance, and therefore, eligible for Modvat credit. It was emphasized that the Tribunal consistently held this view, making Modvat credit admissible for Molybdenum wire. 5. Judgment and Decision: After hearing both sides, the judge considered whether the case should be governed by the earlier decision in the case of Apar Limited or the subsequent judgments in other cases. It was noted that the later decisions overturned the earlier one, establishing that Molybdenum wire qualified as an input for Modvat credit. Given the detailed examination of the issue in the previous judgments and the identical nature of the present case, the judge upheld the Commissioner's decision, rejecting the Revenue's appeals based on the consistent Tribunal rulings favoring the admissibility of Modvat credit on Molybdenum wire.
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