2007 (2) TMI 557 - AT - Central Excise

Summary

Issues:
1. Interpretation of conditions for availing deemed credit under Notification No. 58/97.
2. Discrepancy in payment by account payee cheque for multiple invoices.
3. Legal implications of adjustment of pending amounts in invoice payments.

Analysis:

Issue 1: Interpretation of conditions for availing deemed credit under Notification No. 58/97
The appellant was availing deemed credit under Notification No. 58/97, which required payment by account payee cheque from the input receiver to the manufacturer. The dispute arose regarding the deemed credit for supplies made under eight invoices by M/s. Vinubhai Steel Co. Pvt. Ltd. to the appellant. The total amount involved in these invoices was Rs. 11,58,579, with deemed credit of Rs. 1,39,029.

Issue 2: Discrepancy in payment by account payee cheque for multiple invoices
The appellant issued a cheque for Rs. 11,47,699 against the total amount, falling short by Rs. 10,880. The authorities held that the discrepancy in payment did not satisfy the condition of payment by account payee cheque for all eight invoices. Consequently, the deemed credit for goods received under all eight invoices was disallowed.

Issue 3: Legal implications of adjustment of pending amounts in invoice payments
The appellant argued that any violation of the payment condition could only be attributed to one invoice, No. 1035 dated 24-1-99, and not to all eight invoices. The learned Advocate contended that the adjustment of pending amounts while making payments was a common trade practice. The Tribunal accepted the explanation for the discrepancy in payment and deemed the credit admissible for seven out of the eight invoices, excluding No. 1035 dated 24-1-99.

In conclusion, the Tribunal partially allowed the appeal, holding the deemed credit valid for seven invoices except for one. The judgment clarifies the interpretation of conditions for availing deemed credit, addresses the discrepancy in payment by account payee cheque, and recognizes the legal implications of adjusting pending amounts in invoice payments.