2005 (5) TMI 566 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit under Notification 58/97.
2. Contention regarding receiving inputs with declaration of appropriate duty payment.
3. Discrepancies in declarations on invoices from different manufacturers.
4. Interpretation of Notification No. 58/97.
5. Precedent set by the Hon'ble Punjab and Haryana High Court in Vikas Pipes v. Central Excise.

Analysis:
The case involved the denial of Modvat credit to the Appellants under Notification 58/97 due to the manufacturers of the inputs not paying appropriate duty. The Adjudicating Authority rejected the deemed credit and imposed a penalty, leading to the dismissal of the Appeal. In the Appeal memorandum, the Appellants argued that they received inputs with declarations from manufacturers stating appropriate duty payment, based on which they claimed deemed credit.

The Revenue contended discrepancies in the declarations on invoices from various manufacturers, highlighting instances where appropriate duty had not been paid despite the declaration. The Tribunal found that the denial of deemed credit was based on the non-payment of appropriate duty by input manufacturers. However, some manufacturers did provide declarations on invoices confirming duty payment, which the Appellants relied on for claiming deemed credit.

The Tribunal referenced the decision of the Hon'ble Punjab and Haryana High Court in Vikas Pipes v. Central Excise, which established that deemed credit cannot be denied under Notification 58/97 if the supplier certifies duty payment on inputs. The High Court ruled that the Appellants are entitled to deemed credit based on invoices with duty discharge declarations, without the need for additional evidence of duty payment by the suppliers. Consequently, the Tribunal disposed of the Appeal in favor of the Appellants based on the High Court's precedent.

In conclusion, the judgment clarified the conditions for claiming deemed credit under Notification 58/97, emphasizing the significance of duty payment declarations on invoices from input suppliers. The decision aligned with the legal precedent set by the Hon'ble Punjab and Haryana High Court, ensuring that Appellants could avail of deemed credit based on valid declarations, while also highlighting the importance of accurate documentation to support such claims.