2005 (6) TMI 407 - AT - Central Excise

Summary

Issues: Challenge to disallowance of Modvat credit under Rule 57-I of CER, 1944 for imported goods exempted from additional duty under Notification No. 36/94.

In this case, the appellant contested the correctness of the order disallowing Modvat credit under Rule 57-I of CER, 1944 for imported Mica paper exempted from additional duty under Notification No. 36/94. The appellant argued that they should be eligible for the credit as they had paid Customs duty. However, both authorities held that the Modvat credit was irregularly claimed since the goods were exempted from additional duty under Section 3 of the Customs Tariff Act. The appellant presented invoices to prove Customs Duty payment, but the JDR contended that they were not entitled to the credit as no duty equivalent to Excise Duty was collected due to the exemption in the Notification.

Upon careful consideration and legal analysis, it was observed that the imported item was indeed exempted from additional duty as per the relevant section and Notification. Consequently, the appellant was deemed ineligible to claim Modvat credit on Customs duty since no additional duty equivalent to Excise Duty had been paid. Therefore, the impugned order disallowing the credit was upheld, and the appeals were dismissed. The decision was pronounced in open court at the conclusion of the hearing.