2003 (9) TMI 690 - AT - Central Excise

Summary

Issues:
- Rejection of Modvat credit on inputs used in the manufacture of goods under Notification No. 203/92-Cus.
- Dispute over Modvat credit rejection under Notification No. 204/92-Cus.
- Requirement of importing raw materials against exports within six months for availing Modvat credit.

Analysis:
The judgment revolves around the rejection of Modvat credit availed by the appellant on inputs used in manufacturing goods under Notification No. 203/92-Cus and Notification No. 204/92-Cus. The appellant's representative argued that they are not contesting the rejection of Modvat credit under Notification No. 203/92 but are challenging the rejection under Notification No. 204/92. The Commissioner (Appeals) had rejected the Modvat credit under Notification No. 204/92, citing the appellant's failure to import raw materials against exports within six months. However, the appellant contended that there is no such condition in the notification mandating the importation of raw materials within a specific timeframe. The importation of raw materials against exports is a facility, not a requirement, and manufacturers have the option to forgo this facility. The appellant argued that denial of Modvat credit based on this condition is unjustified.

During the proceedings, the Revenue representative could not demonstrate any provision in the notification that necessitated the importation of raw materials against exports within six months. The only point of contention was the Commissioner (Appeals) acknowledging that Modvat credit is indeed permissible under Notification No. 204/92. Consequently, the Tribunal reversed the decisions of the lower authorities concerning the Modvat credit availed by the appellants under Notification No. 204/92-Cus. The appeal was allowed in favor of the appellants, emphasizing that there was no valid justification for denying the Modvat credit based on the condition of importing raw materials within a specific timeframe.