2007 (5) TMI 95 - AT - Central Excise

Cenvat/Modvat -Department contended that appellant is not entitle to utilize the credit before the date entries were made in RG-23A, Part I register - Held that the department contention was not correct and allowed the appellant appeal

Summary

Issues:
1. Entitlement to duty credit based on the date of goods receipt.
2. Utilization of duty credit before entry in RG 23A, Part I Register.

Analysis:

Issue 1: Entitlement to duty credit based on the date of goods receipt
The appellants received the impugned goods in their factory on 15-3-01 after office hours but before midnight. The goods receipt note was prepared on 16-3-01, mentioning the goods received on the previous day. The ld. Consultant argued that since the goods were received on 15-3-01, they were entitled to the credit for the goods and could use it for duty payment during the first fortnight. The security personnel's stamp on relevant documents corroborated the receipt date. The Tribunal found that the Rules allow for duty credit as soon as goods are received in a factory. As the goods were received on 15-3-01 and duly recorded by security personnel and the official preparing the note on the next office day, the appellants were entitled to the credit for goods received on 15-3-01. The Tribunal emphasized that there was no requirement in the Rule to relate the credit to the entry date in the register.

Issue 2: Utilization of duty credit before entry in RG 23A, Part I Register
The Department contended that credit is only available from the date of entry in the register, which was on 16-3-01 in this case. However, the Tribunal disagreed, stating that the Rules do not mandate such a correlation between goods receipt date and register entry date. Since the goods were actually received on 15-3-01 and there was no dispute regarding the receipt date, the appellants were deemed entitled to duty credit for those goods. The Tribunal held that there was no short-payment of duty by the appellants and set aside the impugned order, allowing the appeal with consequential benefits to the appellants.

In conclusion, the Tribunal ruled in favor of the appellants, affirming their entitlement to duty credit based on the actual date of goods receipt and rejecting the Department's argument linking credit availability to the register entry date.