TMI Blog2004 (5) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... o why the said claims of refund should not be rejected on the grounds - Annealing and pickling does not amount to manufacture. Hence the product i.e. stainless steel wire rods coils annealed and pickled are not dutiable. As per Rule 57C of the Central Excise Rules, 1944; no credit of duty paid on inputs is allowed if the final product is exempt from duty or chargeable to nil rate of duty. As your product is chargeable to nil rate of duty, the credit of duty paid on inputs cleared from your Kalwe plant is not admissible. And therefore the reversal of Rs. 57,70,924.68 is correct and in order. Hence the question of refund of the said amount does not arise . After hearing the appellant the Assistant Commissioner found - I have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not changed. I, therefore, find that the process of annealing and pickling does not amount to manufacture under Section 2(f) of the Central Excises Salt Act, 1944 and their product, therefore, was not dutiable. I, therefore, find that their availment of Modvat credit was wrong and inadmissible as per Rule 57C of the Central Excises Salt Act, 1944 as per which credit under Rule 57A is not admissible if the final product is not dutiable i.e. exempt from duty or chargeable to nil rate of duty. In view of the above, I come to the conclusion that their product i.e. Wire Rods annealed and pickled was not dutiable and Modvat credit taken by them on inputs intermediates used in the said product was not admissible and therefore the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbides in the steel are removed including its deplete and its corrosion and it helps to reduce tensile strength of the metal and to restore its ductility and change the microstructure and grain take place. Pickling results in removal of scales which were formed on the metal during the controlling and annealing operations. It is therefore clear that pickling is really nothing more than cleaning the surface of the rods and does not impart any additional quality to them that they did not possess earlier. The position is somewhat less clear with regard to annealing. It is possible to contend, as has been done, that the changes in the microstructure and grain as a result of this process render it suitable for uses in application where it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in respect of stainless steel wire-rods they received at Kurla plant was in discharge of export obligation under VABAL scheme and also because no manufacturing activities were conducted at Kurla unit in respect of stainless steel wire-rods but the same goods which were received were so exported. I do not find any force in the appellant s contention that no SCN was issued to them for dis-allowing such Modvat credit. The appellants had already debited reversed paid the amount involved but had subsequently claimed the refund of the same. The Asstt. Commissioner in the impugned order disposed of the subject refund claim. I also find that SCN dt. 18-9-95 was issued before rejecting the subject refund claim. The amount having already bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allege violation of not. 203/92-Cus. It only speaks about the total ineligibility of the Credits under the Modvat Scheme rules in this case. The finding also allude as to a separate show cause notice being prepared to deny the Credit availed during the entire period. In fact a show cause notice was issued adjudication by the Commissioner, wherein in appeal the Tribunal vide its Order No. C-II/660/669/99-WZB, dt. 22-3-99 [1999 (111) E.L.T. 403 (T)] found the demand of reversal of Modvat credit recovery thereof to be barred by limitation. However the Tribunal observed as - ..We are unable to accept entirely the Contention of the advocate for the appellant that the processes of annealing and pickling amount to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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