2004 (4) TMI 460 - AT - Central Excise

Summary

Issues: Denial of Modvat credit on Cement & Steel Wire due to violation of Rules 57H and 57G

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the denial of Modvat credit amounting to Rs. 1,42,968/- to the respondents. The issue stemmed from the respondents availing credit on Cement & Steel Wire, which was contested by the adjudicating authority citing a violation of Rules 57H and 57G. The authority noted that the respondents wrongly claimed the credit by making a consolidated entry in the RG-23A, Part II register. However, the Commissioner (Appeals) overturned this decision, emphasizing that the respondents had filed a declaration under Rule 57H and the stock was required to be verified by the Range Officer. Nonetheless, it was highlighted that the respondents failed to establish the total receipt of inputs and their utilization in the final product manufacturing process. The lack of proper records documenting the receipt and issuance of inputs led to the conclusion that the Modvat credit could not be allowed, considering the violation of Rules 57H and 57G.

The Appellate Tribunal, after careful consideration, set aside the impugned order, deeming it legally unsustainable. The matter was remanded back to the adjudicating authority for a fresh decision. The respondents were instructed to provide detailed information regarding the inputs received and utilized during the relevant period. The Tribunal clarified that the respondents must demonstrate the proper receipt and utilization of inputs to be eligible for the Modvat credit. Consequently, the appeal of the Revenue was allowed on the grounds of remand, necessitating a reevaluation of the case by the adjudicating authority based on the provided details.