PUNJAB CERAMICS LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue for determination in the above appeal which arises out of the order of the Collector, Central Excise (Appeals), Chandigarh is the eligibility to Modvat credit of duty paid on pig iron used by the appellants herein in the manufacture of the ceramic insulator. The appellants used pig iron and the intermediate product manufactured therefrom is disc/cap which is then captively consumed in the manufacture of the final product of the appellants viz. ceramic insulator. Credit has been disallowed by the authorities below on the ground that this disc/cap which is a product of casting does not attract any duty; on the other hand it is the case of the appellants that the disc/cap are in the nature of intermediate products which are admittedly captively consumed by them in the manufacture of ceramic insulator and hence they are covered by the provisions of Rule 57D(2) of the Central Excise Rules, 1944.

(2.) WE have heard Shri K.K. Anand, ld. Counsel and Shri Jangir Singh, ld. JDR.

(3.) WE find that the show -cause notice proceeds on the basis that casting product such as disc/cap are captively consumed by the appellants; that there is no dispute that cast products are further used in the manufacture of ceramic and the ceramic insulators are admittedly cleared on payment of duty. The fallacy in the order of the authorities below arises, therefore, in treating the cast product as final product in themselves. The cast products are in the nature of intermediate product of pig iron, therefore, the cast products are the intermediate products and ceramic insulators are the final product for the appellants. Therefore, the ld. Counsel is correct in his contention that the Modvat credit cannot be denied as the final products are not hit by the bar of the provisions of Rule 57C because they are cleared on payment of duty, and the cast products such as disc and cap are intermediate products to which the provisions of Rule 57D(2) get attracted. We therefore, hold that the appellants are entitled to the benefit of credit of duty paid on pig iron, set aside the impugned order and allow the appeal with consequential relief, if any, due to the appellants in accordance with law.