JCT LTD. Vs. C.C.E.

JUDGEMENT

(1.) This appeal relates to denial of Modvat credit on two grounds - The first is in respect of bright steel bars which got consumed in the manufacture of steel wires and the second is in respect of LDPE granules sent to job worker for conversion into polythene bags. In the first case, credit is being denied on the ground that the bright steel bars arc not inputs in the manufacture. Bright steel bars arc used for holing and dipping wires in the acid tank in the process of annealing. These bars get consumed upon coming into contact with acid. The submission of the learned Counsel for the appellant is that the use of the bright steel bar is "in relation to" the manufacturing process and is therefore, eligible for Modvat credit as input. In regard to LDPE granules, denial of credit was on the ground that mere was delay in its return after conversion. The delay varies from 9 to 25 days. During the hearing of a case, learned DR has pointed out that the appellant had not applied promptly for extension of time. Submission of the learned Counsel for the appellant is that the Tribunal has already held in the case of Godrej Foods Ltd. v. C.C.F., Bhopal - 2001 (133) E.L.T. 81 that extension is to be considered even in cases where the applications for extension of lime are filed beyond the period of 60 days.

(2.) I have perused the record and heard the submissions made by both sides. Clearly, the use of bright steel bar is in relation to the manufacture of finished product. Therefore, it is to be treated as input. Denial of credit is not justified. In the case of LDPE granules, there is no dispute that raw material came back after conversion. In such a case, there is no justification for denial of Modvat credit merely on the ground that there was delay of some days in the return of the goods. Delay in filing of extension is also no ground for denying credit. Therefore, the case is required to be considered on merits as held by the Tribunal in the case of Godrej Foods Ltd. The delay in the present case was a short period which was beyond the appellant's control. Denial of credit in such case is not justified.

(3.) In view of what is stated above, the appeal is allowed after setting aside the impugned order.