2000 (5) TMI 97 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Appeal confirming demand for availing ineligible Modvat credit.
2. Consideration of documentary evidence for inputs received and consumed.
3. Interpretation of Board's circular on Modvat credit denial.
4. Allowance of credit on paper cones declared as capital goods.

Analysis:
1. The Revenue appealed against the Order-in-Appeal confirming a demand of Rs. 64,020 under Rule 57-I for availing ineligible Modvat credit. The Commissioner (Appeals) set aside the Order passed by the Assistant Commissioner, highlighting discrepancies in invoice endorsements and delivery locations. The Commissioner relied on Board's clarification advising against denying credit based on invoices issued in the name of Head Office. Citing relevant case laws, the Commissioner allowed the appeal.

2. The Commissioner observed that the Assistant Commissioner failed to consider documentary evidence proving the receipt and consumption of inputs at the appellant's unit. The Commissioner's decision was influenced by previous judgments emphasizing that Modvat credit should not be denied to manufacturing units based on invoice endorsements from Head Offices.

3. The Revenue contended that the party contravened Rule 57F(1)(ii) by endorsing invoices instead of transferring inputs as per regulations. Disputing the reliance on the Board's circular, the Revenue argued against the allowance of Modvat credit based on the addressed locations in the invoices.

4. The Commissioner allowed credit of Rs. 14,800 taken on paper cones, categorized as capital goods under Rule 57T instead of inputs under Rule 57G. The Revenue referenced previous cases to challenge this decision, emphasizing the non-specification of inputs in the declaration. However, the Commissioner upheld the credit based on the similarity of prescribed details in declarations under Rule 57G and Rule 57T.

In conclusion, the Tribunal rejected the Revenue's appeal, affirming the Commissioner's decision to allow Modvat credit to the respondents. The Tribunal found no grounds to deny the credit, considering the organizational structure, inadvertent errors in invoice addressing, and the proper declaration of paper cones as inputs.