2002 (6) TMI 561 - AT - Central Excise

Summary

Issues:
Availability of deemed credit to M/s. Rubicon Steels under Notification No. 58/97-Central Excise.

Analysis:
The main issue in this appeal before the Appellate Tribunal CEGAT, New Delhi was whether deemed credit is available to M/s. Rubicon Steels under Notification No. 58/97-Central Excise, dated 30-8-97. The Departmental Representative argued that the Modvat credit was disallowed by the Deputy Commissioner as the suppliers had not discharged their duty liability as determined by the Commissioner. On the other hand, the Advocate for the Respondent contended that the respondents were eligible for deemed Modvat credit under the notification and relied on a previous Tribunal decision to support their argument.

The Tribunal analyzed Notification No. 58/97, which provides for the availment of deemed Modvat credit. It was noted that the duty of excise on inputs shall be deemed to have been paid and credited to the manufacturer of the final product. However, the utilization of deemed credit is subject to the conditions specified in the notification itself. The Tribunal highlighted that the notification applies only to inputs received directly from the manufacturer of the said inputs under the cover of an invoice declaring the payment of appropriate duty of excise. The Deputy Commissioner found that three suppliers had not discharged their duty liability, as contended by the Revenue.

Referring to a Supreme Court decision, the Tribunal emphasized the importance of paying the correct amount of excise duty to avail of exemption benefits. As the respondents were not given an opportunity to challenge the verification report from the Central Excise Division, the Tribunal deemed it necessary for the matter to be remanded back to the Adjudicating Authority for further examination. The Tribunal allowed the appeal by way of remand to ensure a fair assessment of whether the appropriate duty had been paid by the suppliers, following principles of natural justice.

In conclusion, the Appellate Tribunal CEGAT, New Delhi allowed the appeal by way of remand, directing the matter back to the Adjudicating Authority for a reevaluation of whether the appropriate duty had been paid by the suppliers to determine the eligibility of deemed Modvat credit for M/s. Rubicon Steels under Notification No. 58/97-Central Excise.