2004 (2) TMI 586 - AT - Central Excise

Summary

Issues:
1. Availing Modvat credit based on ineligible documents.
2. Rectification of defects in records by the dealer.
3. Rejection of Modvat credit claim by the authorities.
4. Granting waiver of pre-deposit and staying recovery.
5. Remanding the matter to original authorities for re-examination.

Analysis:
1. The appellant purchased Bitumen from Indian Oil Corporation (IOC), a First Stage Dealer registered with the Central Excise Department. The Department alleged that the appellant availed Modvat credit on the basis of ineligible documents as the dealer did not make necessary entries in the RG 23D register for passing on the Modvat Credit under Rule 57GG.

2. The appellant's counsel submitted that the dealer rectified the defects in records, but the letter confirming the rectification was not produced during adjudication. However, it was argued that since all defects were rectified, the Modvat Credit was rightfully claimed.

3. The Junior Departmental Representative (JDR) contended that the documents proving the rectification were not presented before the authorities, justifying the order rejecting the Modvat credit claim.

4. Upon careful consideration, the judge observed that all defects in the documents and registers were rectified by the dealer. A letter from Indian Oil Corporation explained the oversight in submitting Modvat Challans and making entries in the RG 23D register. The judge granted waiver of pre-deposit, stayed recovery, and allowed the appeal for hearing by remanding the matter to the original authority for a fresh examination.

5. The judge directed the original authority to conduct a 'de novo' consideration, re-examine the issue in light of the rectified documents/registers, and pass an appropriate order after providing a reasonable opportunity for the appellants to be heard. The decision was to be made within six months from the date of the order, allowing the appeal by remanding it to the original authorities and disposing of the Stay Application accordingly.