2004 (9) TMI 470 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit by the Commissioner.
2. Requirement of intimating the arrival of capital goods to the department for Modvat credit.

Issue 1: Denial of Modvat credit by the Commissioner
The appeal before the Appellate Tribunal arose from an order where the Commissioner quashed the proceedings for the denial of Modvat credit. The Commissioner referred to Circular No. 441/7/99-CE, dated 23-2-1999, which allowed credit of duty paid on inputs/capital goods despite minor procedural lapses. The Adjudicating Authority did not dispute the receipt, duty paid character, or utilization of the goods in the manufacturing process. The lapses were considered minor and could have been ignored. The Tribunal noted the applicability of CEGAT's judgment in a similar case and the clarificatory instructions from the Board's office. Consequently, the Modvat credit was partially allowed based on the mentioned judgments and circulars, leading to the setting aside of the impugned order partially.

Issue 2: Requirement of intimating the arrival of capital goods for Modvat credit
The dispute revolved around the Modvat credit taken by the assessee without intimating the arrival of capital goods to the department. However, it was observed that the assessee had filed a declaration. Referring to Circular No. 441/7/99-CX, dated 23-2-1999, it was highlighted that an adjudication proceeding should only be initiated if the Assistant Commissioner finds the credit taken by the assessee to be incorrect after due inquiry. In this case, there was no allegation that the credit taken was incorrect. As a result, the Tribunal found no error in the Commissioner's order, leading to the rejection of the appeal as it failed to establish any substance in the dispute regarding the Modvat credit taken by the assessee without intimating the arrival of capital goods to the department.

This detailed analysis of the judgment provides insights into the issues of denial of Modvat credit and the requirement of intimating the arrival of capital goods for claiming such credit. The Tribunal's decision was based on legal precedents, circulars, and the specific circumstances of the case, ensuring a fair and thorough examination of the matters at hand.