2003 (10) TMI 588 - AT - Central Excise

Summary

Issues:
1. Dispute regarding Modvat credit denial based on delayed filing of declaration.
2. Disallowance of claim for credit on Spinnerete.
3. Denial of credit for various reasons such as commercial invoices, invoices not in the name of the appellants, excess credit taken, and credit based on original invoices without a speaking order.

Analysis:

1. The first issue revolves around the denial of Modvat credit amounting to Rs. 7,37,576 due to the delayed filing of a declaration. The appellant argued that as per the Larger Bench decision in the case of Kamakhya Steels (P) Ltd. v. Commissioner of Central Excise, the credit should be permissible even if the declaration was filed after three months. The Tribunal agreed with this argument and permitted the Modvat claim, citing the provisions of Sub-Rule (11) of Rule 57G introduced by Notification No. 7/99-C.E. (N.T.).

2. The second issue concerns the disallowance of credit for Spinnerete, where the authorities alleged that the payment was for labor charges. The appellant clarified that the payment was for converting old spinnerettes into new ones by a job worker, and the duty paid on this cannot be considered as labor cost but as duty on capital goods. The Tribunal upheld the appellant's argument, stating that as long as the duty payment at the supplier's end is not disputed, the credit cannot be disallowed.

3. The third issue involves the denial of credit for various reasons such as commercial invoices, invoices not in the name of the appellants, excess credit taken, and credit based on original invoices without a speaking order. During the hearing, these denials were not pressed and were deemed unsubstantiated. However, regarding credit based on original invoices, the Tribunal found that the denial lacked a speaking order and remanded this part of the order back to the original adjudicating authority for further consideration based on the principles of natural justice.

In conclusion, the appeal was partly allowed, permitting the Modvat claim that was initially denied due to delayed declaration, rejecting claims for credit on certain invoices, and remanding the issue of credit based on original invoices back to the adjudicating authority for a fresh decision.