2003 (11) TMI 513 - AT - Central Excise

Summary

Issues:
1. Applicability of Modvat credit on inputs furnace oil.
2. Validity of documents maintained by a PSU Unit.
3. Decision of Commissioner (Appeals) setting aside the order and confirming demands.

Analysis:

Issue 1: Applicability of Modvat credit on inputs furnace oil
The appellant availed Modvat credit on furnace oil from Indian Oil Corporation, Manali. The department alleged that the documents were not according to Central Excise Rules and hence the benefit could not be granted. The Assistant Commissioner found no irregularity in the invoices issued by the PSU Unit and allowed the Modvat credit. However, the Commissioner (Appeals) set aside this decision and confirmed the demands.

Issue 2: Validity of documents maintained by a PSU Unit
The Commissioner (Appeals) placed the responsibility on the appellant for the non-maintenance of records by the PSU Unit. It was highlighted that the invoices were in order, and the appellant should not be questioned regarding the non-maintainability of account books by the PSU.

Issue 3: Decision of Commissioner (Appeals) setting aside the order and confirming demands
Upon prima facie consideration, it was noted that the appellant had a strong case. The validity of the invoice, which was the basis for taking Modvat credit, was questioned by the Commissioner (Appeals). The judge found grounds for waiver of the pre-deposit of duty amount and allowed the stay application, granting waiver and staying the recovery until the appeal's disposal.

In conclusion, the judgment addressed the issues related to the Modvat credit on furnace oil, the validity of documents maintained by the PSU Unit, and the decision of the Commissioner (Appeals) to set aside the order and confirm demands. The judge found in favor of the appellant, granting a waiver of the duty amount and staying its recovery pending the appeal hearing scheduled for February 13, 2004.