2005 (5) TMI 486 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty and penalty based on the Modvat credit taken on capital goods.

Analysis:
The appellants filed an application seeking waiver of pre-deposit of duty amounting to Rs. 5,55,85,531/- and penalty of Rs. 3 lakhs. The main contention revolved around the Modvat credit taken on capital goods based on the quadruplicate copy of the Bill of Entry. The Revenue, however, denied the credit citing that the credit was taken on the triplicate copy of the Bill of Entry, which they argued was not a valid duty paying document.

The applicants relied on Rule 57T of the Central Excise Rules, which stipulates that no credit of specified duty shall be taken unless the capital goods are received in the factory under the cover of an invoice, Bill of Entry, or other prescribed documents. They emphasized that Rule 57G specifically governs the credit in respect of inputs, allowing credit only on the triplicate copy of the Bill of Entry, while there are no such specific provisions for credit on capital goods.

In response, the Revenue leaned on Rule 57G of the Central Excise Rules, which pertains to credit in respect of inputs. However, the Tribunal noted that Rule 57T deals with credit in respect of capital goods and only mentions the Bill of Entry. Upon a prima facie examination, the Tribunal found that the appellants had a strong case in their favor. Consequently, the Tribunal decided to waive the pre-deposit of the entire duty and penalty for the appeal hearing, allowing the Stay petition.

This judgment underscores the importance of specific provisions within the Central Excise Rules governing the credit on inputs and capital goods. The Tribunal's decision to grant the waiver of pre-deposit was based on the interpretation of these rules and the arguments presented by both parties regarding the validity of the duty paying documents in question.