2002 (8) TMI 854 - AT - Central Excise

Summary

Issues involved:
- Denial of deemed Modvat credit on inputs supplied by manufacturers of hot re-rolled iron and steel products under certain invoices.

Detailed Analysis:
1. The appellants were denied deemed Modvat credit by lower authorities based on the ground that the input-manufacturers did not declare the duty-paid nature of the inputs in the invoices. The appellants argued that they were entitled to the credit as per Notification No. 58/97-CE and cited precedents supporting their claim, including a decision in Delhi Steel Industries vs. CCE, Chandigarh 2002 (48) RLT 753. They also referred to Final Order No. 326/02/NB(DB) in M/s. Shivaye Industries vs. CCE, Chandigarh, which highlighted that no certificate from the Range Supdt. of Central Excise certifying duty-paid nature of inputs was required under the said Notification.

2. The Departmental Representative (DR) contended that other Single-Member Benches had taken a different view on the matter, but failed to provide any contrary decision. Upon examination, it was revealed that some invoices declared "duty liability discharged under Rule 96ZP (3)", while others mentioned "duty liability to be discharged under Rule 96ZP(3)" or "goods cleared under Rule 96ZP". The Tribunal referred to the Central Government's declaration in para 2 of the Notification, stating that the duty of excise on the inputs shall be deemed to have been paid, and any further declaration by the input-supplier was unnecessary.

3. The Tribunal emphasized that the declaration-related condition in para-4 of the Notification, requiring input-manufacturers' invoices to declare the appropriate duty of excise paid on the inputs, should not contradict the substantive provisions of the Notification. It was noted that the substantial provisions of deemed Modvat credit were in paras 1, 2, and 3 of the Notification, with para-2 containing the Central Government's declaration of deemed duty payment on inputs. The Tribunal concluded that denial of deemed Modvat credit based on the absence of input-manufacturers' declaration in para-4 would be contradictory to the Government's declaration in para-2.

4. Ultimately, the Tribunal found that the appellants had complied with the substantive requirements of Notification No. 58/97-CE, and were entitled to take the deemed Modvat credit based on the invoices in question. As a result, the appeal was allowed, and the appellants were granted the credit they sought.