2002 (4) TMI 597 - AT - Central Excise

Summary

Issues involved: Whether Modvat credit of duty paid on inputs is available to the appellant in respect of final products initially treated as exempted from duty.

The appellant, a manufacturing company, was initially treating certain final products as exempt from duty. Subsequently, duty was demanded on these products, and the appellant paid the duty. The dispute arose regarding the availability of Modvat credit on the duty paid inputs used in manufacturing these products.

The appellant contended that they should be allowed Modvat credit for the period before they started paying duty on the final products. They cited relevant case laws to support their argument.

The Departmental Representative argued that Modvat credit can only be availed from the date of filing the declaration under Rule 57G, and since the appellant filed the declaration on 12-11-1997, they are eligible for Modvat credit only from that date.

After considering the arguments from both sides, the Tribunal noted that the appellant had not followed the prescribed procedure for availing Modvat credit. However, based on previous decisions, the Tribunal held that the appellant is eligible to avail of the Modvat credit of the duty paid on inputs, even if the procedure was not strictly followed. The appellant was directed to produce duty paying documents to the satisfaction of the jurisdictional Assistant/Deputy Commissioner for availing the credit.

Therefore, the appeal was allowed, and the appellant was granted the Modvat credit of the duty paid on inputs, subject to the condition mentioned above.