2007 (10) TMI 212 - HC - Customs

In spite of the fact that RG23A register was not maintained at the relevant time, the assessee has produced necessary documents like stock register, input invoice, original cardex records, copies of declaration, material receipt notes in respect of the said inputs it clearly establish that the assessee is entitled to the Modvat credit on the inputs used in the manufacture of the final product - on the basis of the documents furnished, the assessee is entitled to the Modvat credit.

Summary

Issues:
Whether the Tribunal was justified in allowing the respondent to take Modvat credit on certain inputs used in the manufacture of goods falling under Chapter 56 of the Central Excise Tariff Act, 1985.

Analysis:
The appeal was filed by the Commissioner of Central Excise against the order passed by the CESTAT regarding the entitlement of the assessee to avail Modvat credit on inputs used in the final products. The assessee had filed a declaration seeking the credit, which was later disallowed by the department, leading to a penalty imposition equivalent to the credit amount. The Commissioner of Central Excise (A) upheld the disallowance, but the Tribunal, on further appeal by the assessee, allowed the claim. The Tribunal's finding was based on the documents provided by the assessee, including stock register, input invoice, cardex records, declaration copies, and material receipt notes, which established the entitlement to Modvat credit.

The Tribunal concluded that despite the absence of the RG23A Part I register, the assessee had provided sufficient documentation to prove the eligibility for Modvat credit on the inputs used in manufacturing the final product. The Tribunal's decision was based on the clear evidence presented by the assessee, which left no dispute regarding the entitlement to the credit. The High Court, in its judgment, affirmed the Tribunal's finding and dismissed the appeal by the Commissioner of Central Excise. The court held that the assessee was indeed entitled to the Modvat credit, even though the RG23A register was not maintained at the relevant time. Consequently, the appeal was dismissed, and no costs were awarded in the matter.