2001 (9) TMI 853 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit due to endorsement on duty documents.
2. Interpretation of Board circulars regarding endorsement of duty documents.
3. Validity of Modvat credit in case of goods transfer between manufacturing units.
4. Application of circulars and case laws in Modvat credit disputes.

Analysis:
1. The appeal challenged the Commissioner (Appeals) findings denying Modvat credit for endorsing documents between manufacturing units. The Commissioner held that the appellant's case did not align with the Board's Circular allowing credit for endorsements to the Head Office. Lack of evidence on actual use, movement of goods, and original packing led to the rejection of the appeal.

2. The case involved the appellants, manufacturers of loudspeakers, availing Modvat credit based on endorsed documents. The Revenue authorities disputed the validity of the documents issued in another unit's name and issued a show cause notice. The Asstt. Commissioner disallowed the credit, leading to the appeal and subsequent rejection by the Commissioner (Appeals).

3. The appellant's counsel argued that the endorsement was valid as per Board circulars, citing Circular No. 179/B/96-CX and Trade Notice No. 275/109/96-CX. They referenced a case involving Caprihans India Ltd. and a Tribunal judgment in the case of L&T Ltd. to support their claim that Modvat credit should not be disallowed in cases of goods transfer between units of the same manufacturer.

4. The Department's representative contended that post-1-4-94 endorsements were not valid for Modvat credit, referring to a Tribunal's decision in Balmer Lawrie & Co. Ltd. The Tribunal examined various circulars and case laws, noting the CBEC's competence to issue subsidiary instructions. Relying on Circular No. 275/109/96-CX, the Tribunal concluded that Modvat credit should not be denied based on endorsed documents for goods transferred between units, overturning the previous decision and allowing the appeal.