2004 (12) TMI 496 - AT - Central Excise

Summary

Issues: Modvat credit on duty paid on de-controlled molasses for manufacture of de-natured ethyl alcohol.

Analysis:
1. Appellant's Argument: The appellants receive de-controlled molasses for the manufacture of ethyl alcohol and de-natured ethyl alcohol. They maintain records as per State Government's prescribed forms, and the State Excise Inspector certifies the utilization of molasses for these purposes. The appellants claim Modvat credit based on these records, but the department denies it.

2. Revenue's Argument: The Revenue argues that the appellants must establish the exact quantity of de-controlled molasses used in manufacturing de-natured ethyl alcohol to claim Modvat credit. They contend that without precise proof of the quantity used, the credit cannot be granted.

3. Judgment: The Tribunal acknowledges the appellants' entitlement to Modvat credit on duty paid for de-controlled molasses used in manufacturing de-natured ethyl alcohol. The Tribunal notes the challenge in determining the quantity of molasses utilized due to variations in quality and storage practices. However, the State Excise Department's certification of the quantity used for de-natured ethyl alcohol is deemed acceptable. The Tribunal directs the Commissioner to allow credit based on this certification, emphasizing the importance of accepting records maintained by the appellants unless there are valid doubts, suggesting further examination if necessary.

4. Conclusion: The Tribunal remands the case to the Commissioner to grant Modvat credit on the quantity of de-controlled molasses used for de-natured ethyl alcohol manufacturing, based on the State Excise Department's certification. The appeal is allowed, emphasizing the significance of utilizing reliable records for credit determination and suggesting cooperation between the appellants and the department in case of doubts.