2005 (1) TMI 457 - AT - Central Excise

Summary

Issues:
1. Denial of Deemed Modvat credit to the appellants in terms of Notification No. 58/97-C.E., dated 30-8-1997.

Analysis:
In this appeal, the issue revolves around the denial of Deemed Modvat credit to the appellants as per Notification No. 58/97-C.E., dated 30-8-1997. The appellants had procured duty-paid inputs from two different manufacturers. The first manufacturer, M/s. Prince Agro & Allied Industries, issued invoices containing declarations stating goods cleared under Rule 96ZP. The Tribunal, citing a previous judgment in the case of Shree Ambica Steel Industries, held that this declaration sufficed to meet the Notification's requirements. Consequently, the Commissioner (Appeals) was found unjustified in denying Modvat credit on inputs from M/s. Prince Agro & Allied Industries.

Moving on to the inputs obtained from the second manufacturer, M/s. Sahara Steel Rolling Mills, the Deemed Credit was refused due to the manufacturer's failure to pay interest on delayed duty payment. However, referencing the Tribunal's ruling in Jagan Tubes Ltd. v. CCE, Chandigarh, it was clarified that interest, not being part of the duty, should not hinder the grant of deemed credit on duty-paid inputs. Therefore, the impugned order denying credit in this scenario was also deemed unsustainable.

As a result of the above analysis, the appeal of the appellants was upheld. The Tribunal set aside the impugned order entirely, allowing the appellants' appeal with consequential relief in accordance with the law.