2003 (2) TMI 384 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit for manufacturers of electric wires and cables based on the receipt of inputs without valid duty paying documents.

Analysis:
1. The case involved manufacturers of electric wires and cables who availed Modvat credit based on the receipt of inputs without valid duty paying documents. The issue was that the goods were received in May 1993 without valid duty paying documents, and the credit was taken in April 1994, raising concerns about the admissibility of the credit under Rule 57G(2) of the Central Excise Rules, 1944.

2. The Tribunal analyzed Rule 57G(2) and a CBEC Circular to determine that duty paying documents need not accompany the inputs at the time of receipt in the factory. The appellants had two units, and one unit transferred copper rods to the other unit under a subsidiary certificate. The subsidiary certificate was misplaced, leading to a delay in entering the goods in the register and taking credit. The Tribunal accepted that duty paying documents can be received subsequently, citing a previous decision in the case of Amal Rasayan Ltd.

3. The Tribunal held that the Modvat credit was admissible to the appellants. The lower authority's argument that the credit was inadmissible due to being taken after ten months from the issuance of the duty payment certificate in June 1993 was dismissed. The Tribunal emphasized that there was no prescribed limitation for availing credit during that period and referred to a case precedent to support the notion that credit should be taken within a reasonable period.

4. Consequently, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellants regarding the admissibility of the Modvat credit for the inputs received without valid duty paying documents.