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2014 (9) TMI 965 - AT - Central ExciseDenial of MODVAT Credit - Contravention the provisions of Rule 57A read with Rule 57G of the Central Excise Rules 1944 - Assessee availed Modvat credit of 40, 854/- during the month of August 1997 on the basis of invoices dated 31-7-1997 - Held that - Impugned order is contrary to the facts on record and the same being perverse is fit to be set aside. I further hold that the appellant have complied with the provisions of Rule 57F(2) read with Rule 173H of the Central Excise Rules read with Trade Notice No. 89/1989 issued by Bombay Commissionerate and accordingly the duty paid credit availed by the appellant at Chinchwad unit in respect of returned goods on the basis of invoice issued by its Ratnagiri unit showing the goods cleared at Nil duty under procedure as per Rule 173H is proper and cannot be faulted with. - Decided in favour of assessee.
Issues:
- Availment of Modvat credit by Chinchwad unit based on invoices from Ratnagiri unit - Allegation of contravention of Rule 57A read with Rule 57G - Confirmation of proposed demand and penalty imposition by Order-in-Original - Dismissal of appeal by Commissioner (Appeals) due to non-showing of duty amount and debit particulars in invoices Analysis: Issue 1: Availment of Modvat credit by Chinchwad unit based on invoices from Ratnagiri unit The case involved M/s. Finolex Industries Ltd. and the credit taken by their Chinchwad unit. The Ratnagiri unit cleared PVC resins to Chinchwad unit after reprocessing defective goods returned by customers. The Revenue issued a show cause notice alleging contravention of rules regarding Modvat credit availed by Chinchwad unit. The appellant argued compliance with prescribed procedures and submitted documents to support their claim. The Tribunal found that the credit availed by the Chinchwad unit was proper as it complied with Rule 57F(2) and Rule 173H, supported by Trade Notices. The appeal was allowed in favor of the appellant. Issue 2: Allegation of contravention of Rule 57A read with Rule 57G The Revenue alleged that the appellant contravened Rule 57A read with Rule 57G by availing Modvat credit based on invoices that did not show duty amount and debit particulars. The Order-in-Original confirmed the demand and imposed a penalty. The appellant contested the show cause notice, citing adherence to prescribed procedures. However, the Order-in-Original found discrepancies in following proper procedures. The Commissioner (Appeals) dismissed the appeal, stating that essential details to establish duty paying character were not explained by the appellant. Issue 3: Confirmation of proposed demand and penalty imposition by Order-in-Original The Order-in-Original confirmed the proposed demand and imposed a penalty on the appellant for not following proper procedures regarding Modvat credit availed by the Chinchwad unit. The penalty was imposed under Rule 173Q of the Central Excise Rules, 1944. The appellant contested this decision, leading to the appeal before the Tribunal. Issue 4: Dismissal of appeal by Commissioner (Appeals) due to non-showing of duty amount and debit particulars in invoices The Commissioner (Appeals) dismissed the appellant's appeal, stating that the duty amount and debit particulars were not shown in the invoices, essential for establishing the duty paying character of the inputs. The Commissioner found the Order-in-Original to be correct and not warranting any interference. This dismissal led to the appellant appealing to the Tribunal, where the decision was overturned in favor of the appellant based on proper compliance with relevant rules and procedures.
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