2004 (3) TMI 598 - AT - Central Excise

Summary

Issues: Denial of Modvat credit based on validity of documents and apportionment of duty paid.

Analysis:
The appeal challenged the order-in-appeal confirming the denial of Modvat credit by the adjudicating authority. The appellants received a consignment of 200 MT of Muriate of Potash, part of a larger quantity imported by M/s. Indian Potash Ltd. The appellants claimed credit based on a certificate from the importer regarding the CVD paid on the 200 MT. However, the certificate and bill of entry were not listed as valid documents under Rule 57G of the Central Excise Rules, 1944 for granting credit.

The adjudicating authority noted that there was no allegation of duty non-payment or misuse of the imported goods in the manufacture of final products. It was observed that the bill of entry indicated a quantity of 28,050 MT for manufacturing complex fertilizer, with the appellants claiming credit for 300 MT even though only 250 MT was cleared for industrial use. Further examination revealed that the actual quantity for industrial use was 149.250 MT, on which CVD duty had been paid, not aligning with the claimed credit of Rs. 3,53,841/-. The judgment emphasized that if no CVD was paid on the quantity meant for fertilizer use, credit could not be granted.

Ultimately, the appellate tribunal upheld the lower authorities' decision to deny the credit, citing lack of merit in the appeal. The judgment concluded that since the documents did not meet the requirements for granting credit and the claimed amount was not supported by the actual imported quantity for industrial use, the denial of Modvat credit was deemed appropriate.