2008 (9) TMI 748 - AT - Central Excise

Summary

Issues:
Appeal against denial of deemed credit for input purchase made through a bank draft instead of a cheque drawn on the appellant's own bank account.

Analysis:
The appellant filed an appeal against an order denying the benefit of deemed credit due to the method of payment for input purchases using a bank draft instead of a cheque drawn on the appellant's own bank account. The revenue sought to deny the credit based on an explanation to Notification No. 58/1997-C.E., dated 30-8-97.

The appellant contended that Notification No. 58/97-C.E. was subsequently amended by Notification No. 2/98-C.E., dated 10-3-98, to include bank drafts and banker's cheques as acceptable modes of payment, in addition to cheques drawn on the appellant's own bank account. The Commissioner (Appeals) in the impugned order held that the amended notification was not clarificatory and not retrospective, thus not applicable to the present case.

Upon review, it was found that the amendment to the notification substituted the wording of the explanation, explicitly including bank drafts as a valid instrument for payment. It was noted that there was no dispute regarding the receipt of consideration by the supplier of inputs. As the amendment to the notification was clarificatory in nature, the impugned order was set aside, and the appeal was allowed.

Therefore, the appellate tribunal concluded that the appellant was entitled to the benefit of deemed credit for the input purchase made through a bank draft, as the amendment to the notification validated such mode of payment, overturning the decision of the Commissioner (Appeals) based on the clarificatory nature of the amendment.