Full Judgment
1. The facts of the case are that the appellant manufactures Bushing metal parts, components for transformers falling under Chapter Sub-neading 8504 and avail Modvat credit for the duty paid on the inputs. They had manufactured metal parts and cleared to Karnataka Vidyut Karkane, which rejected the same and returned back, due to some technical defects with the invoice raised by them, for clearing the rejected goods on payment of Central Excise duty. The Appellant availed the Modvat credit on the said document. Show cause notice was issued by the range Supdt. objecting that since the Modvat credit was taken on the final product it is not permissible under Rule 57A. After the receipt of the reply, and hearing the Appellant, the Assistant Commissioner has passed the order in original confirming the demand of Rs. 9459.10 as per show cause notice, dated 24-11-1995. The appeal preferred by the appellant on the said order has been rejected on 13-1-1998 on the ground that the rejected material is not an input.
Hence this appeal.
2. The Appellant has by the letter, dated 7-7-1998 informed that the duty amount as per the order-in-original, as confirmed in the impugned order is debited in RG23A part II account under Entry No. 973, dated 30-3-1998, as mentioned in column No. 9 of the EA3, and the appeal may be decided on merits as per the Appeal Memorandum. Heard the learned DR. Shri S.V. Singh, who has pointed out Para 5 Clause E of the appeal Memorandum and submitted that it is necessary to verify whether the Appellant has filed any declaration showing the rejected goods as an input to uphold the claim of the Appellant.
3. Perused the orders-in-original and Appeal, and the Appeal Memorandum, it is seen that both the lower authorities have held that the rejected goods is the final product of the Appellant, on which the Modvat credit is not available again. The case law relied upon by the Appellant in Clause E of the Para 5 in page 2 of Appeal Memorandum, in 1993 (68) E.L.T. 146 (Tribunal) in the case of Alcobex Metal Ltd. in 1995 (78) E.L.T. 282 (Tribunal) in the case of Omini Forgings Gujarat Pvt. Ltd. supports the contention of the Appellant that the Modvat credit is permissible if declaration is filed under Rule 57G showing the rejected goods as the input. Nowhere, it is mentioned by the Appellant on what date declaration is filed, nor a copy of it is produced in this case. So under these circumstances as contended by the learned DR, this has to be verified, and then decide the claim of the Appellant. So the appeal has to be remanded to the Assistant Commissioner for that purpose. Hence I pass the following order: For the reasons indicated above, the appeal is allowed, and the matter is remanded to the Assistant Commissioner to verify whether the Appellant has filed any Modvat declaration under Rule 57G indicating the rejected material in this case as an input, and then after hearing the party, dispose off the case according to law.