MAITHAN CERAMIC LTD. Vs. CCE

JUDGEMENT

(1.) After dispensing with the condition of predeposit of duty and penalty I take up the appeal itself inasmuch as the issue is covered in favour of the appellant by the larger Bench decision of the Tribunal.

(2.) The short point involved in the present appeal is that whether the appellants are entitled to take the modvat credit in respect of the refractory bricks which were originally cleared from their factory as final product on payment of duty, but were subsequently rejected by their customers who paid the duty on the same and sent the goods back to the appellants. The appellant has taken the credit of duty paid by their customers inasmuch as the said rejected refractory bricks were used by them as an input in the manufacture of fresh refractory bricks in their factory.

(3.) I find that the larger Bench of the Tribunal in the case of CCE, Meerut v. Tin Mfg. Company has held that defective duty paid metal containers received from the customers are the inputs for the manufacture of the new metal containers and the duty paid by the customers is available as modvat credit to the assessee. To the similar effect is the decision of the larger Bench in another case of CCE, Meerut v. Bhusan Steels and Strips Ltd. 2000 (39) RLT 200 (CEGAT -LB) : 2001 (97) ECR 8 (T -LB). Another decision of the larger Bench in the case of Hindalco Indus. Ltd. v. CCE, Allahabad 2000 (38) RLT 986 (CEGAT -LB) also Lays down that the duty paid on the defective and rejected goods is available as modvat credit to the manufacturers.