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2005 (9) TMI 538 - AT - Central Excise
Issues:
Grant of Modvat credit on rejected diesel engine parts supplied to Railways, time limit for availing credit, applicability of Rule 57G(2) on credit after six months, importance of document date of return of goods, challenge to findings of CCE (A). Analysis: The appeal concerns the grant of Modvat credit on rejected diesel engine parts supplied to Railways, specifically focusing on the time limit for availing credit. The Revenue appealed against the decision to allow credit on the grounds that there was no time limit of six months to avail credit. The Appellate Tribunal found that the limit did not apply to the return of one's own goods, citing the case of Lakshmi Automatic Works. Consequently, a credit of Rs. 2,44,296/- was allowed, and a penalty of Rs. 40,000/- was set aside. Regarding the grounds taken in the appeal, the first issue raised was that Rule 57G(2) does not permit credit after six months, with reference to previous decisions such as Kusum Ingots & Alloys Ltd. and Osram Surya. The second ground highlighted the difference in facts compared to those relied upon by the ld. CCE (A). However, upon examination, it was found that the counting of the period of six months from the date of receipt of the inputs, not the issue of invoices, was to be upheld in the case of returned goods from the Railways. The document date of return of the goods was deemed crucial and not under challenge. The original invoices served as evidence of the duty paid nature of the goods, not the date of return invoices or challans issued by the Railways. As no violation of Rule 57G(2) was established, the appeal was rejected. In conclusion, the judgment upheld the decision to allow Modvat credit on the rejected diesel engine parts supplied to Railways, emphasizing the exemption from the six-month time limit for returning one's own goods. The importance of the document date of return of goods and the lack of violation of Rule 57G(2) were key factors in the tribunal's decision to reject the appeal.
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