2004 (6) TMI 486 - AT - Central Excise

Summary

Issues:
1. Availability of deemed Modvat credit to the appellants under Notification No. 58/97.
2. Denial of credit on inputs due to manufacturer's failure to declare invoice price correctly.
3. Legal right of appellants to claim deemed Modvat credit without show cause notice to manufacturer/supplier.
4. Compliance with Notification No. 58/97 for claiming deemed Modvat credit.

Detailed Analysis:
1. The appeal concerns the availability of deemed Modvat credit to the appellants as per Notification No. 58/97. The issue revolves around the denial of credit on inputs by the authorities due to the manufacturer's failure to correctly declare the invoice price of the inputs in the documents issued at the time of goods clearance.

2. The learned Counsel argued that since no show cause notice was issued to the manufacturer/supplier for not providing the necessary details in the invoices, the appellants should not be denied the deemed credit. However, the Judge disagreed, stating that the benefit of the Notification for claiming deemed Modvat credit could not be availed by the appellants due to the specific bar in Clause (5) of the Notification.

3. The non-issuance of a show cause notice to the manufacturer/supplier did not grant the appellants the legal right to claim deemed Modvat credit. The appellants were required to comply with the provisions of the Notification to avail the credit. The Judge emphasized that the appellants could have rectified the mistake in the invoices by approaching the manufacturer/supplier but failed to do so. Therefore, the appellants had to bear the consequences, not the manufacturer/supplier.

4. Ultimately, the Judge upheld the impugned order, dismissing the appeal of the appellants. The decision was based on the appellants' failure to meet the requirements of Notification No. 58/97 for claiming deemed Modvat credit on the inputs, as outlined in Clause (5) of the Notification. The judgment differentiated this case from the precedent cited by the Counsel, emphasizing the specific circumstances at hand.