1999 (8) TMI 239 - AT - Central Excise

Summary

Issues involved:
1. Duty demand on various types of scrap.
2. Denial of Modvat credit on brass coils.
3. Appeal by Revenue regarding demand on brass caps.

Duty demand on various types of scrap:
The Adjudicating authority confirmed a duty demand on scrap generated in the factory of the appellants due to availing Modvat credit on inputs, making the inputs non-duty paid. The Tribunal referred to the decision in Metal Lamp Caps India Ltd. v. Collector of Central Excise, Bangalore, stating that taking Modvat credit does not render inputs non-duty paid. The demand on scrap prior to 2-11-1987 was set aside as exemptions were amended post that date. The penalty imposed was also set aside.

Denial of Modvat credit on brass coils:
The denial of Modvat credit on brass coils used in manufacturing brass caps and steel bottom caps was based on the argument that these products were used in a different factory than the one where torches were manufactured. The Tribunal noted that the issue of using common inputs for declared and undeclared final products had been addressed in previous cases. Following the precedent, the denial of credit was set aside as it was a technical objection with no revenue implications.

Appeal by Revenue regarding demand on brass caps:
The Revenue's appeal on the demand for brass caps cleared by the torch unit was rejected as time-barred. The Adjudicating authority held that even if duty was payable on brass caps, the other units could take credit and utilize it for payment on batteries. The contention that brass caps fell under a different tariff item was deemed untenable, as they were not covered by that item. The failure to follow procedural requirements did not amount to suppression, and the demand was considered barred by limitation.