2009 (2) TMI 596 - AT - Central Excise

Summary

Issues: Availment of MODVAT credit on inputs received under delivery challan for captive consumption; Disallowance of credit and imposition of penalty by adjudicating authority; Appeal by Revenue against Commissioner (Appeals) decision to allow credit.

The issue in this case revolved around the availment of MODVAT credit on inputs received under a delivery challan for captive consumption. The adjudicating authority disallowed credit amounting to Rs. 4,35,190/- and imposed a penalty of Rs. 20,000. The Commissioner (Appeals) later overturned this decision and allowed the credit, leading to an appeal by the Revenue.

The department contended that as per Notification No. 29/2000-C.E., the inputs should have been received under an invoice for sale to be eligible for credit. Since the inputs in question were received under a delivery challan, the department argued that the challan was not a valid document for credit availment.

The relevant clauses (4) and (5) of the notification stated that the inputs must be received directly from the manufacturer under the cover of an invoice declaring payment of excise duty. However, a precedent set by the Tribunal in the case of CCE, Coimbatore v. Bharat Electric Stampings held that credit could not be denied solely based on receiving inputs under a stock transfer invoice. The Tribunal emphasized that as long as the duty payment nature of the inputs was not in dispute, credit should be allowed. Therefore, the Tribunal upheld the decision of the lower appellate authority to allow the credit and rejected the Revenue's appeal.