2004 (11) TMI 512 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit and imposition of penalty based on Bill of Entry not in appellant's name.

In this case, the issue revolved around the disallowance of Modvat credit amounting to Rs. 1,80,203/- and the imposition of a penalty of Rs. 20,000 on the appellant. The dispute arose from the Bill of Entry not being in the appellant's name but in the name of their Head office, and the entire goods covered by the Bill of Entry not being transferred to the appellant. The lower authority referred to a Board Circular clarifying that Modvat credit should not be denied if the entire consignment covered by the Bill of Entry is received in the factory in its original packed condition. However, the lower authority did not apply this circular, citing that the entire quantity covered under the Bill of Entry was not received by the appellant.

Analysis of the Judgment:

1. The appellant argued that there was no allegation in the show cause notice regarding the non-transfer of the entire quantity to them. They cited a Tribunal decision in the case of Larsen & Toubro v. Collector, which held that the Bill of Entry being in the name of the Head Office should not result in the denial of credit to the appellant.

2. The judgment considered Board Circular No. 441/7/99-CX, which stated that credit should not be denied if the duty paid character of the inputs is not disputed, and the receipt of the inputs in the appellant's factory is confirmed. Since there was no dispute in the present case regarding these aspects, the impugned order disallowing the Modvat credit and imposing a penalty was set aside, and the appeal was allowed in favor of the appellant.

3. As a result of allowing the appeal, the miscellaneous application for an extension of stay became infructuous and was disposed of accordingly. The appellant was granted consequential relief in this matter.

This judgment highlights the importance of adhering to legal provisions and circulars while dealing with the disallowance of credits and penalties related to customs and excise matters. It emphasizes the need for proper documentation and compliance to ensure the smooth processing of claims and appeals in such cases.