2006 (7) TMI 216 - HC - Central Excise

Summary

Issues involved:
The appeal involves the interpretation of Rule 57F(4) and the legality of availing credit for duty paid when not required to be paid as per Notification No. 214/86-CX.

Interpretation of Rule 57F(4):
The revenue appealed against the Tribunal's order, questioning the interpretation of Rule 57F(4) by the Tribunal. The case involved an assessee who sent goods for job work, with the job worker being exempted from duty payment as per notification. Despite this exemption, the job worker paid the duty, and the assessee claimed Modvat credit for this duty payment. The Commissioner disallowed this claim, but the Tribunal reversed the decision. The Tribunal allowed the Modvat credit as the duty was actually paid by the job worker, even though not required to do so. The High Court cited a previous case where a similar issue was dismissed, leading to the present appeal being dismissed as well.

Legality of availing credit for duty paid:
The Tribunal's decision to allow the Modvat credit for duty paid, even when not required, was upheld by the High Court based on the actual payment made by the job worker. The Court referenced a previous case where a similar issue was raised and dismissed, reinforcing the decision to allow the credit in the present case. The appeal by the revenue was thus dismissed, affirming the Tribunal's decision.

This summary highlights the key issues of the judgment, focusing on the interpretation of Rule 57F(4) and the legality of availing credit for duty paid in a scenario where it was not required to be paid. The High Court's decision to dismiss the appeal and uphold the Tribunal's ruling is based on the actual payment made by the job worker, despite the exemption, as established in previous similar cases.