2005 (7) TMI 550 - AT - Central Excise

Summary

Issues:
Denial of deemed Modvat credit under Notification No. 58/97 to the respondents.

The judgment delivered by the Appellate Tribunal CESTAT, New Delhi pertains to appeals filed by the Revenue against a common order-in-appeal regarding the denial of deemed Modvat credit to the respondents under Notification No. 58/97. The respondents, engaged in the manufacture of Steel products, procured inputs with invoices containing a declaration "duty to be discharged under Rule 96-ZP(3)". The Commissioner (Appeals) accepted this declaration as sufficient for availing deemed Modvat credit, citing a judgment of the Hon'ble Punjab & Haryana High Court. However, the Tribunal found the Commissioner's view erroneous, stating that the duty liability was not discharged by the manufacturers at the time of clearance to the respondents. The Tribunal highlighted a distinction between "duty liability to be discharged" and "duty liability discharged," emphasizing that the latter was required by the notification. The Tribunal disagreed with the interpretation of the judgment cited by the Commissioner, clarifying that in the mentioned case, the duty liability was discharged, and additional proof was sought, unlike the current scenario where the duty liability remained outstanding. Consequently, the Tribunal set aside the order granting deemed Modvat credit to the respondents, ruling in favor of the Revenue in these appeals.

In conclusion, the Appellate Tribunal CESTAT, New Delhi, in its judgment, addressed the issue of denial of deemed Modvat credit under Notification No. 58/97 to the respondents. The Tribunal analyzed the declarations on the invoices, the distinction between "duty liability to be discharged" and "duty liability discharged," and the interpretation of a previous judgment by the Hon'ble Punjab & Haryana High Court. By highlighting the failure of the manufacturers to discharge duty liability at the time of clearance to the respondents, the Tribunal overturned the decision of the Commissioner (Appeals) and allowed the appeals of the Revenue, emphasizing the necessity for compliance with the specific requirements of the notification for availing deemed Modvat credit.