2007 (1) TMI 399 - AT - Central Excise

Summary

Issues involved: Appeal against demand denial and penalty imposition u/s Modvat scheme for mis-declaration of goods by manufacturer.

Summary:

Issue 1: Demand denial and penalty imposition under Modvat scheme

The Revenue filed an appeal against an order setting aside a demand and penalty imposed under the Modvat scheme due to mis-declaration of goods by the manufacturer. The appellant received raw material under invoices mis-declared by the manufacturer, leading to a dispute over duty payment under Section 3A of the Central Excise Act. The Commissioner (Appeals) set aside the demand, stating that the mis-declaration was by the supplier/manufacturer, not the appellant, and there was no evidence of connivance to evade duty. The Revenue contended that the appellant availed Modvat credit wrongly as the goods received were different from those described in the invoices. However, the Tribunal found that the appellant received inputs from a different manufacturer, and since no action was taken against the manufacturer for mis-declaration, the Revenue could not dispute the duty payment at the recipient's end. The appeal was dismissed, upholding the appellant's right to take credit for the duty paid by the manufacturer.

(Order dictated and pronounced in the Court on 12-1-2006)