2006 (2) TMI 421 - AT - Central Excise

Summary

Issues:
Eligibility for deemed Modvat credit under Notification No. 58/97 based on the declaration in supplier's invoices.

Analysis:
The dispute revolves around the eligibility of the appellant for deemed Modvat credit under Notification No. 58/97 due to the absence of a specific declaration on the supplier's invoices regarding the payment of excise duty under Section 3A of the Central Excise Act. The appellant argues that the supplier, M/s. Paradise Steel Rolling Mills, was working under Section 3A, as evidenced by declarations on the invoices and a certificate confirming duty discharge. The appellant highlights a previous Tribunal order and a High Court judgment supporting their position. The Revenue, however, contends that the certificate provided does not confirm duty discharge under Section 3A, citing a Tribunal decision requiring specific certificates on invoices for credit eligibility.

The crux of the matter lies in the wording of the certificate on the supplier's invoices regarding duty payment, not in the actual discharge of duty under Section 3A by Paradise Steel Rolling Mills. The appellant's submission includes evidence such as a certificate and TR challans demonstrating duty payment, which was not disputed during adjudication. The dispute mainly concerns the interpretation of the certificate's language and not the fact that duty was being paid under Section 3A. The Revenue's argument focuses on the technicality of the certificate not explicitly confirming duty discharge under Section 3A, relying on a previous Tribunal decision emphasizing the need for specific certificates on invoices for credit allowance.

The Tribunal clarifies that deemed Modvat credit is available to assessees purchasing inputs from suppliers discharging duty under Section 3A, irrespective of the quantum of duty paid. The key consideration is whether duty is being discharged under Section 3A, not the exact amount paid. The Tribunal also references the Vikas Pipes case, establishing that the assessee need not prove full duty liability discharge by the supplier to claim Modvat benefit. Consequently, the Tribunal finds that the appellant's supplier was indeed discharging duty under Section 3A, rendering the Revenue's objections regarding the certificate's language unsustainable. As a result, the impugned order is set aside, and the appeal is allowed.