2001 (10) TMI 820 - AT - Central Excise

Summary

Issues:
- Admissibility of deemed Modvat credit on inputs supplied by manufacturers under Compounded Levy Scheme.
- Requirement of declaration in invoices for availing Modvat credit.
- Consideration of certificates from Central Excise Range Officers as evidence of duty payment.
- Rejection of photocopies of TR-6 Challans as conclusive evidence.
- Review of lower appellate authority's decision on deemed Modvat credit.

Analysis:
The judgment revolves around the admissibility of deemed Modvat credit on inputs supplied by manufacturers under the Compounded Levy Scheme. The appellant had taken such credit based on invoices lacking the necessary declaration of duty discharge as per Notification No. 58/97-C.E. The Department proposed disallowing the credit, leading to a dispute. The adjudicating authority allowed credit from two manufacturers with certificates from Range Officers but denied credit from four others. The main issue was whether deemed credit could be granted based on photocopies of TR-6 Challans without the required declaration in invoices.

The appellant argued that TR-6 Challans and certificates from manufacturers were presented but not considered adequately by the authorities. The appellant's counsel emphasized compliance with Notification No. 58/97-C.E. and requested credit approval. Conversely, the Respondent contended that invoices lacking the declaration could not support deemed credit. The Respondent highlighted the necessity of evidence establishing duty payment and supported the authorities' decision to reject TR-6 Challans as insufficient proof.

The judge analyzed the Notification's requirements for deemed Modvat credit and emphasized the mandatory duty-paying document, i.e., invoices with the necessary declaration. Since the invoices lacked this declaration, the burden was on the authorities to verify duty payment by the manufacturers. The judge upheld the requirement for certificates from Central Excise Range Officers to certify duty payment. Certificates from two manufacturers were submitted later, prompting a review of the denial of credit from those manufacturers.

In conclusion, the judge set aside the denial of deemed Modvat credit for two manufacturers with submitted certificates for reevaluation. However, credit denial for the remaining manufacturers stood, pending the submission of certificates establishing duty payment. The judgment stressed the importance of fulfilling Notification requirements for availing Modvat credit and the significance of proper documentation to support claims.