2002 (12) TMI 343 - AT - Central Excise

Summary

Issues:
Appeal against deemed Modvat credit allowance based on invoice price including additional charges.

Analysis:
The appeals involved a challenge by the Revenue against an order allowing deemed Modvat credit to the respondents based on the invoice price, including various charges. The Revenue contended that the credit should only be claimed on the actual price of the goods, excluding additional charges like freight, insurance, sales tax, and others. On the contrary, the respondents argued that the invoice price for deemed Modvat credit had been defined by the Board itself and they had followed the guidelines accordingly.

The Commissioner (Appeals) had sided with the respondents, rejecting the Revenue's plea and allowing the deemed Modvat credit. The Revenue reiterated its stance that the additional charges should not be included in the invoice price for claiming credit. However, the Tribunal disagreed with this argument. The Tribunal referred to the Explanation to Notification No. 58/97, which defined the invoice price as the total price paid by the assessee to the manufacturer, including all charges. Additionally, the Board's Circular clarified that the invoice price for deemed Modvat credit should encompass all charges paid by the assessee to the manufacturer.

Based on the Explanation and the Circular, the Tribunal concluded that the respondents were entitled to deemed Modvat credit equivalent to 12% of the invoice price of the inputs, inclusive of all charges. The Tribunal found the Commissioner (Appeals)' decision justifiable in law, as it aligned with the legal provisions and clarifications provided by the Board. Consequently, the Tribunal upheld the impugned order of the Commissioner (Appeals) and dismissed the Revenue's appeals for lacking merit.