2004 (2) TMI 605 - AT - Central Excise

Summary

Issues:
Claim for Modvat credit in respect of capital goods obtained on lease basis denied.

Analysis:
The appeal was against the order denying Modvat credit for capital goods obtained on lease basis. The show cause notice alleged non-compliance with Rule 57R of Central Excise Rules, 1944 and Notification No. 27/94-C.E. (N.T.). The adjudication order stated that the duty payment proof to the financing company was not provided. However, it was argued that the objection lacked specificity and the hire purchase agreement clearly outlined the appellants' duty payment obligations.

The adjudicating authority's findings were deemed unsubstantiated. The show cause notice did not specify the alleged non-compliance, and the adjudication order improperly expanded on the notice. Moreover, the objection regarding duty payment was found to be incorrect as per the hire purchase agreement terms. The agreement clearly indicated the appellants' responsibility for duty payments, rendering the objection invalid.

Upon review, it was concluded that the lower authorities' orders were unsustainable. Consequently, the orders were set aside, and the appellant's appeal was allowed with appropriate relief as per the law.