2001 (7) TMI 200 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit by Deputy Commissioner under Rule 57-I.
2. Rejection of appeals by Commissioner (Appeals) based on the definition of invoice.
3. Appeal against the order of Commissioner (Appeals) regarding Modvat credit denial.

Issue 1: Denial of Modvat credit by Deputy Commissioner under Rule 57-I
The appellants, engaged in manufacturing Iron & Steel Products, availed Modvat credit based on invoices from M/s. Achal Investments Ltd. However, the Deputy Commissioner of Central Excise denied the credit, citing a contravention of Notification No. 14/95-C.E.(N.T.). The denial was due to the absence of a sale transaction between the trader and the assessee, as the trader only charged conversion fees without indicating the assessable value on the invoices. The Deputy Commissioner emphasized that Modvat credit is permissible only when a sale is involved, as per the notification's provisions.

Issue 2: Rejection of appeals by Commissioner (Appeals) based on the definition of invoice
The appeals filed by the party were rejected by the Commissioner (Appeals) who highlighted the importance of the definition of an invoice under Notification No. 32/94-C.E.(N.T.). The Commissioner clarified that invoices for getting goods manufactured on job charges do not qualify as valid invoices for Modvat credit under the notification. Therefore, the invoices issued by M/s. Achal Investments Ltd. were deemed invalid for claiming Modvat credit.

Issue 3: Appeal against the order of Commissioner (Appeals) regarding Modvat credit denial
In the present appeals challenging the Commissioner (Appeals) order, the appellants argued for reconsideration based on the Tribunal's decision in a similar case and the Board's Circular clarifying the definition of "sale and purchase" under the Central Excise Act. The appellants requested a remand to the original authority for de novo consideration in line with the Board's instructions. The JDR, however, supported the findings of the lower authorities. After considering the submissions, the Member (T) observed that the denial of Modvat credit solely based on the absence of a sale transaction was incorrect. Following the Board's instructions and previous Tribunal decisions, the matter was remanded to the original authority for a fresh assessment, ensuring the appellants are given a fair hearing before a final decision is made.