2004 (11) TMI 497 - AT - Central Excise

Summary

Issues: Challenge to Modvat credit allowance by Commissioner (Appeals-II)

In this judgment, the Appellate Tribunal CESTAT, New Delhi, addressed the challenge made by the Revenue against the Order of the Commissioner (Appeals-II) that allowed Modvat credit of a disputed amount to the respondents. The facts were undisputed, where the respondents purchased parts and components for a chilled water unit from a supplier who had acquired the goods from the manufacturers. The invoices for the goods were issued in the name of the supplier, not the respondents. The Tribunal emphasized that as the invoices were not in the name of the respondents, they could not legally claim credit under Rule 57G. The argument that the respondents were entitled to claim Modvat credit because the goods were supplied and installed in their factory premises after endorsing the invoices was deemed misconceived. The Tribunal highlighted that no credit on the endorsed invoices could be legally availed by the respondents. The Tribunal rejected the contention that the mere installation of the goods in the factory entitled the respondents to claim Modvat credit, emphasizing that not getting their name inserted in the invoices was not a procedural lapse. The Tribunal found the view taken by the Commissioner (Appeals) to be erroneous and contrary to the provisions of Rule 57G.

As a result of the above discussion, the Tribunal set aside the impugned order and allowed the appeal of the revenue, providing consequential relief as per law. The judgment serves as a reminder of the importance of compliance with legal provisions regarding the entitlement to claim Modvat credit and highlights the significance of invoices being issued in the name of the party seeking credit under the relevant rules.