2010 (3) TMI 1161 - HC - Central Excise

CENVAT Credit - duty paying invoices - Whether private challans other than the prescribed documents are valid for taking modvat credit under the Central Excise Rules, 1944? - Held that - The respondent-manufacturer would be entitled to claim Modvat credit on the strength of private challans, as the same were not found to be fake and there was a proper certification that duty had been paid - appeal dismissed - decided against Revenue.

Summary

Issues involved: Validity of private challans for claiming Modvat credit under Central Excise Rules, 1944.

Analysis:
The High Court was tasked with adjudicating on the question of whether private challans, not among the specified documents under Rule 57G of the Central Excise Rules, 1944, could be considered valid for claiming Modvat credit. The Revenue contended that since private challans were not specified documents, the respondent should not be allowed to claim Modvat credit based on them. However, the Court referred to previous judgments to support its decision. In the case of Commissioner of Central Excise, Panchkula vs. M/s Auto Spark Industries, the Court had held that if duty payment is undisputed and documents are genuine, the manufacturer is entitled to Modvat credit on duty paid inputs. This principle was also upheld in other cases like Commissioner of Central Excise, Ludhiana vs. Ralson India Ltd. and Commissioner of Central Excise, Delhi-III, Gurgaon vs. Myron Electricals Private Limited.

The Court emphasized that as long as the duty paid character of inputs and their proper utilization were not in dispute, the manufacturer should not be denied credit. In the present case, since the private challans were deemed genuine and certified to have duty paid, the respondent-manufacturer was deemed entitled to claim Modvat credit based on them. Consequently, the Court ruled in favor of the assessee and against the Revenue, allowing the Modvat credit claim based on the private challans.