2008 (3) TMI 239 - AT - Central Excise

Original authority denying deemed credit on inputs received from the depot of the manufacturer under Notification No. 29/2000 deemed input credit is extended on specified iron and steel goods subject to conditions that the inputs are received from the factory of the manufacturer directly since in the present case inputs were received from manufacturer s depot not directly from manufacturer s factory benefit of notification is not allowable

Summary

Issues:
- Denial of deemed credit on inputs received from the depot of the manufacturer under Notification No. 29/2000-C.E. (N.T.)
- Interpretation of conditions under the notification for availing deemed credit
- Compliance with conditions of the notification by the appellant
- Legal principles regarding the interpretation of exemption notifications and deemed credit

Analysis:
1. The case involved the denial of deemed credit on iron and steel goods received from the depot of the manufacturer by the appellant under Notification No. 29/2000-C.E. The lower authorities had denied the benefit citing non-satisfaction of substantive conditions for availing deemed credit.

2. The appellant argued that they had substantially complied with the conditions of the notification, citing legal precedents emphasizing that exemption notifications should not be interpreted in a manner that defeats the purpose of exemption. The appellant also relied on a trade notice clarifying the intended object of the notification and the decision in Nexus Computers Pvt. Ltd. case regarding treating depot invoices as manufacturer's invoices for credit availment.

3. The Member (T) analyzed the case records and submissions. The main condition for availing deemed credit under the notification required direct receipt of inputs from the manufacturer's factory under an invoice declaring excise duty payment. However, in this case, the goods were received from depots, not the factory directly, and under depot invoices. The Member emphasized strict construction of the notification's conditions, stating that the condition was designed to ensure the benefit reached the intended recipients and could not be diluted by case law not directly applicable.

4. The Member concluded that the impugned order denying deemed credit was in accordance with the law. The literal interpretation of the notification's conditions was deemed appropriate, and the case law and trade notice cited did not alter the substantive requirement of direct receipt from the manufacturer's factory. Therefore, the appeal was dismissed, upholding the lower authorities' decision.

Judgment:
The appeal against the denial of deemed credit under Notification No. 29/2000-C.E. (N.T.) for inputs received from the manufacturer's depot was dismissed by the Appellate Tribunal CESTAT, Chennai. The Member (T) upheld the lower authorities' decision, emphasizing the strict interpretation of the notification's conditions and the lack of direct receipt from the manufacturer's factory by the appellant.