2005 (3) TMI 641 - AT - Central Excise

Summary

Issues:
- Availment of Modvat credit of Central Excise duty paid subsequently to goods clearance based on Certificate under Rule 57E.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the issue of availment of Modvat credit of Central Excise duty paid subsequently to the clearance of goods based on a Certificate issued under Rule 57E. The appellant, a beverages manufacturer, had obtained concentrates from another company and availed Modvat credit on the duty paid by the supplier. The dispute arose when the Commissioner (Appeals) disallowed the credit, stating that obtaining a Certificate under Rule 57E was necessary for availing the credit if additional duty was paid, which the appellant had not obtained. However, the appellant argued that they had indeed produced a Certificate under Rule 57E, making them eligible for the credit.

The learned Advocate for the appellant contended that the Commissioner (Appeals) erred in finding that the appellant had not obtained the required 57E Certificate, contrary to the facts on record. The Assistant Commissioner's Order-in-Original acknowledged the production of the Certificate, indicating the appellant's eligibility for the Modvat credit on the duty paid subsequently by the supplier. Additionally, the appellant argued against the Commissioner's assertion that the credit was inadmissible due to the inputs not being visible, clarifying that they had received concentrates on duty payment from the supplier, and the duty pertained to the inputs only after the assessable value was recalculated to include royalty/trademark usage fee.

Upon considering the submissions, the Tribunal found that the appellant had indeed produced the necessary Certificate under Rule 57E, as confirmed in the Order-in-Original by the Assistant Commissioner. The Tribunal also rejected the argument that the credit was inadmissible due to the nature of the inputs, emphasizing that the duty was paid on the assessable value of the concentrate, which constituted an input for the appellant's manufacturing process. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, affirming their eligibility to avail of the Modvat credit on the duty paid subsequently by their supplier.