2003 (1) TMI 578 - AT - Central Excise

Summary

Issues:
- Availability of Modvat Credit on capital goods received from another company
- Validity of invoices for claiming Modvat Credit

Analysis:
1. Availability of Modvat Credit on capital goods received from another company:
The main issue in this case was whether M/s. Hongo India (P) Limited could avail Modvat Credit on capital goods, specifically moulds, dies, and fixtures received from M/s. Honda Siel Cars (India) Limited. The appellant argued that they were entitled to the credit as they received the goods under an agreement and paid appropriate duty. The Commissioner had disallowed the credit, stating that the invoices issued did not meet the requirements under Rule 52A. However, the Tribunal referred to a previous case involving M/s. Rasandik Engineering Industries (I) Limited and held that the removal of capital goods for home consumption does not necessarily require a sale, and invoices can be issued for the removal of excisable goods, not just for sale. Citing previous decisions and a clarification from the Central Board of Excise & Customs, the Tribunal allowed the Modvat Credit, setting aside the Commissioner's decision.

2. Validity of invoices for claiming Modvat Credit:
The Tribunal also addressed the issue of the validity of invoices for claiming Modvat Credit. It was argued that the invoices issued by M/s. Honda Siel Cars (India) Limited did not depict the sale, leading to the disallowance of the credit. However, the Tribunal emphasized that invoices under Rule 52A can be issued for the sale or removal of excisable goods, not just for sale. By following the precedent set in the case of M/s. Rasandik Engineering Industries (I) Limited and other relevant decisions, the Tribunal concluded that the invoices were valid for claiming Modvat Credit. Consequently, the impugned order disallowing the credit was set aside, and both appeals were allowed based on the established legal principles and interpretations.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, through a detailed analysis of the issues involved, clarified the availability of Modvat Credit on capital goods received from another company and the validity of invoices for claiming such credit. By relying on previous decisions and legal interpretations, the Tribunal allowed the appeals and set aside the Commissioner's decision, ensuring that M/s. Hongo India (P) Limited could avail the Modvat Credit on the capital goods received from M/s. Honda Siel Cars (India) Limited.