2007 (2) TMI 523 - AT - Central Excise

Summary

Issues:
- Applicability of Rule 57G of Central Excise Rules, 1944 for availing Modvat credit based on a certificate issued under Rule 57E
- Denial of Modvat credit by the adjudicating authority and Commissioner (Appeals)
- Interpretation of the relevant rules for availing Modvat credit

Analysis:

The case involved a dispute regarding the availing of Modvat credit by the appellant based on a certificate issued under Rule 57E of the Central Excise Rules, 1944. M/s. Birla Vxl Ltd. had cleared goods for export, which were later diverted for home consumption. The appellant purchased a portion of these goods and received a certificate from the Superintendent of Central Excise under Rule 57E. The adjudicating authority imposed a duty demand and penalty, contending that the certificate was not prescribed under Rule 57G. The Commissioner (Appeals) upheld this decision.

The appellant's counsel argued that the appellant received duty-paid goods as confirmed by the certificate issued by the Superintendent of Central Excise, thus entitling them to Modvat credit. On the other hand, the Departmental Representative supported the previous decisions, stating that the certificate under Rule 57E was irrelevant as there was no duty adjustment involved. The Tribunal noted that the appellant received the inputs, which were used in the final product, as confirmed by the certificate. The Tribunal found no justification for the revenue's argument that the certificate was issued under Rule 57E, thus denying Modvat credit. It was highlighted that Rule 57G(3)(1) prescribed the certificate by the Superintendent of Central Excise for availing Modvat credit. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant.

In conclusion, the Tribunal's decision emphasized the importance of complying with the specific rules governing the availing of Modvat credit under the Central Excise Rules, 1944. The judgment clarified that the appellant, having received duty-paid goods supported by the necessary certificate, was entitled to avail Modvat credit as per the relevant provisions, overriding the earlier decisions of the adjudicating authority and the Commissioner (Appeals).