2021 (11) TMI 782 - AT - Central Excise

MODVAT Credit - stock lying as on 31.03.2003 in terms of Notification No.25/2003-CE(NT) dated 25.03.2003 - Credit in respect of inputs in transit before 31.03.2003 - Modvat Credit in respect of inputs which were in transit was denied on the ground that the goods were only in transit and were not in stock as on 31.03.2003 - HELD THAT - The appellant have obtained the report under RTI given by the Range Superintendent to the Commissioner (Adjudication) vide letter dated 5.12.2005. From the said report, it is clear that the Range Superintendent has recorded the Grey Stock in transit therefore, it is not in dispute that there is a stock which was covered under the consignment which were in transit as on 31.03.2003. Whether in terms of the notification allowing the credit on the stock as on 31.03.2003 whether the goods in transit shall be considered as stock as on 31.03.2003? - HELD THAT - This tribunal in the earlier round of appeal remanded the matter making a categorical observation that the issue to be decided in the light of the judgments in the case of ELECON FABRICS VERSUS COMMISSIONER OF CUS. C. EX., RAJKOT 2007 (6) TMI 57 - CESTAT, AHMEDABAD where it was held that there is no dispute that the said goods have been received and utilized by the appellants. Private records including the subsequent returns filed by them indicates the details of such receipts and utilization. Inasmuch as the Board envisaged the condonation of procedural lapses to ensure the credit being taken as a transitional measure, the order of the Commissioner (Appeals) is set aside. Thus, it is clear that even though the goods have not arrived in the factory but the assessee have purchased the goods and the said goods were in transit, the same was considered as stock as on 31.03.2003 and Modvat Credit was allowed. Therefore, ratio of the judgment is clearly applicable in the facts of the present case. The appellant is entitle for Modvat Credit also in respect of stock which was in transit accordingly the Modvat Credit is allowed - Appeal allowed.

Summary

Issues:
Admissibility of Modvat Credit on goods in transit as on 31.03.2003.

Analysis:

Issue 1: Admissibility of Modvat Credit on goods in transit

The appellant claimed Modvat Credit on stock as of 31.03.2003 and on inputs in transit before that date. Initially, the adjudicating authority allowed credit for stock in the factory but denied it for goods in transit. Upon appeal, the tribunal remanded the matter for reevaluation, emphasizing the need to consider previous judgments. In the subsequent hearing, the adjudicating authority once again rejected the credit for goods in transit, leading to the current appeal.

The appellant argued that the tribunal's directive was clear in considering the eligibility of Modvat Credit for goods in transit based on specific judgments. They presented evidence, including a report by the Range Superintendent, confirming the presence of goods in transit on 31.03.2003. The appellant contended that previous tribunal decisions supported allowing Modvat Credit for goods in transit, as long as the goods were purchased and in transit on the critical date.

Upon review, the tribunal acknowledged the existence of goods in transit on 31.03.2003, supported by the Range Superintendent's report. Referring to relevant circulars and judgments, the tribunal highlighted that the eligibility for deemed credit extended to goods not only in the factory but also elsewhere, subject to certain conditions. The tribunal emphasized that procedural lapses should not hinder credit availability, especially when the goods were purchased and utilized by the appellant.

In alignment with previous tribunal decisions and circulars, the tribunal ruled in favor of the appellant, allowing Modvat Credit for goods in transit on 31.03.2003. The tribunal emphasized that the goods' actual arrival at the factory was not a prerequisite as long as the purchase could be established. The impugned order was modified accordingly, and the appeal was allowed.

In conclusion, the tribunal's decision underscored the importance of considering previous judgments and circulars in determining the admissibility of Modvat Credit for goods in transit on the critical date, ultimately ruling in favor of the appellant based on established principles and evidence.

This comprehensive analysis delves into the issues surrounding the admissibility of Modvat Credit on goods in transit as on 31.03.2003, detailing the arguments presented by the appellant, the tribunal's review of relevant evidence and legal provisions, and the final ruling in favor of the appellant based on established legal principles and precedents.