2003 (10) TMI 533 - AT - Central Excise

Summary

Issues: Modvat credit denial due to technical mistake in date of credit taken.

Analysis:
1. The issue in this case revolves around the denial of Modvat credit due to a technical mistake in the date on which the credit was taken. The Commissioner (Appeals) had noted that the credit was taken on 6-4-1994 instead of the correct date, which was 8-4-1994. However, it was emphasized that as long as there is no dispute regarding the receipt and utilization of inputs for manufacturing finished goods, the Modvat credit, being a substantial right, cannot be denied based on a technical error.

2. The Revenue, in its appeal, referred to a previous case involving M/s. Akanksha Steels (P) Ltd. v. CCE, Jaipur-II, where it was held that procedural conditions specified in notifications are mandatory and binding. Despite this argument, the Tribunal considered the facts of the current case. It was acknowledged that the goods were duty paid and used in the manufacturing process, with the only issue being the incorrect date of credit taken. The Tribunal highlighted that had the credit been taken on the correct date, it would have been admissible, and there was no evidence that the credit was utilized before the correct date.

3. After considering the submissions from both sides, the Tribunal concluded that the denial of credit based on the date discrepancy was unwarranted. It was established that the credit should not be denied, and no penalty should be imposed for the technical lapse. Consequently, the Revenue's appeal was rejected, affirming the decision in favor of the appellant.

This judgment underscores the importance of substantive rights in tax matters and the need to balance procedural requirements with the overarching principles of fairness and justice in tax adjudication.