2003 (4) TMI 475 - AT - Central Excise

Summary

Issues:
1. Eligibility of the appellant to take Modvat credit on duty paid on iron and steel supplied by a specific company.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Mumbai concerned the eligibility of the appellant to claim Modvat credit on duty paid on iron and steel supplied by Visvesvaraya Iron & Steel Ltd. The dispute arose when a notice was issued proposing to deny credit for goods received between August 1993 and March 1994. The issue revolved around the interpretation of Circular F. No. 263/47/89-CX. 8, dated 23-10-1989, which specified that only certificates issued by Steel Authority of India Ltd. (SAIL) and Tata Iron and Steel Co. Ltd. (TISCO) were recognized for claiming credit. The Assistant Commissioner and Commissioner (Appeals) upheld the denial, leading to the appeal.

The Tribunal delved into the history of circulars issued by the Board regarding acceptance of documents for Modvat credit. Even before the Modvat scheme, instructions were provided for taking proforma credit under Rule 56A. Circular No. 75/81 highlighted the acceptance of certificates from SAIL and TISCO in lieu of subsidiary gate passes. Subsequent circulars clarified that certificates from stockyards certifying duty payment could be used for Modvat credit. The circular dated 23-10-1989, relied upon by the department, restricted credit to certificates from SAIL and TISCO only, disregarding earlier circulars allowing credit based on certificates from stockyards of integrated steel plants like Visvesvaraya Iron & Steel Ltd.

The Tribunal rejected the department's contention that the 1981 circular was limited to SAIL and TISCO certificates, emphasizing that subsequent circulars did not support this narrow interpretation. The circular of 1989 was deemed erroneous as it overlooked previous instructions and subsequent clarifications. Notably, Notification 16/94 listed documents for credit, citing the 1986 circular of the Board, which included certificates from stockyards. Since Visvesvaraya Iron & Steel Ltd. was an integrated steel plant, its certificates were deemed valid for claiming credit, akin to certificates from SAIL and TISCO. Consequently, the appeal was allowed, and the impugned order denying credit was set aside.