2005 (4) TMI 415 - AT - Central Excise

Summary

Issues:
Challenge to denial of Modvat credit under Notification No. 302/88-C.E. based on alleged evasion of duty by the manufacturer.

Analysis:
The appeal challenged the denial of Modvat credit under Notification No. 302/88-C.E. to the appellants due to alleged evasion of duty by the manufacturer, M/s. Nova Udyog Ltd. The appellants contended that they purchased M.S. Billets from various traders in the market and should not be denied credit based on the manufacturer's actions. The counsel referenced previous Tribunal judgments where Modvat credit was allowed in similar situations. The adjudicating authority had denied credit citing the manufacturer's evasion of duty, but the Tribunal reversed such decisions in other cases involving the same goods.

The ld. SDR supported the correctness of the impugned order, while the Tribunal considered both arguments and reviewed the record. It was found that the appellants indeed purchased M.S. Billets from different traders in the market. There was no concrete evidence to show that the goods in the traders' possession did not bear duty. The fact that the manufacturer was accused of duty evasion did not automatically implicate the appellants. There was no proof of collusion or identity of the goods between the manufacturer and the appellants. The appellants had no direct dealings with the manufacturer, and their purchases were from independent traders. Therefore, the Tribunal concluded that the appellants were entitled to the Deemed Modvat credit under Notification No. 202/88-C.E., as their case aligned with previous Tribunal judgments where similar credits were allowed in comparable circumstances.

Consequently, the Tribunal set aside the impugned order entirely in favor of the appellants, allowing their appeal with consequential relief as per the law. The decision was pronounced in open court on 6-4-2005 by the Tribunal members P.S. Bajaj and K.C. Mamgain.