2006 (2) TMI 414 - AT - Central Excise

Summary

Issues:
Penalties imposed on the appellant for issuance of Modvat invoices for steel plates; Entitlement of the appellant to issue Modvat invoices for steel items; Availability of Modvat credit on steel plates as inputs for manufacturing excisable goods.

Analysis:
The appeal was restored to its original number after the production of COD clearance. The grievance of the appellants was the unjustified penalties imposed on them. The first appellant, a public sector dealer of petroleum products, required steel tanks for storage and sent steel plates to a job worker for fabrication under its invoices. The Modvat credits were denied, and penalties were imposed on the appellant and its employee for violation of Modvat Rules due to the issuance of Modvat invoices for steel plates. The appellant contended that registration under Modvat Rules is not specific to any item and argued for entitlement to issue Modvat invoices for steel items. The appellant also claimed that Modvat credit was due on steel plates as inputs for manufacturing excisable goods.

The Tribunal found that any error in issuing the dealers' invoices did not amount to an offense. It was established that Modvat credit was available on the steel consignment as they were inputs. The appellant could have transferred the credit to the job worker, making the imposition of penalties unjustified. Consequently, the penalties were set aside, and the appeals were allowed. The judgment was dictated and pronounced in open court on 20-2-2006.