2001 (10) TMI 210 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat credit after the prescribed period.
2. Non-compliance with procedural rules for availing credit on own invoice.
3. Eligibility of credit on misplaced duty paying invoices.
4. Reversal and re-availment of credit on repaired/reconditioned goods.

Analysis:

Issue 1: Availment of Modvat credit after the prescribed period
The Commissioner disallowed Modvat credit as it was availed after 6 months from the date of the invoice, citing Rule 57G and Notification No. 28/95. The Asstt. Commissioner granted permission for credit after the deadline, leading to the denial of credit. However, the appellant argued that the duty paying invoice was lost, and they followed the prescribed procedure by seeking permission for credit. The appellate member found that the credit was timely taken within 6 months from the date of permission granted by the Asstt. Commissioner, making the credit eligible. The crucial event for credit admissibility is the availment, not the act of taking credit, as per the precedent set in Kusum Ingots & Alloys Ltd. case.

Issue 2: Non-compliance with procedural rules for availing credit on own invoice
The appellant availed credit on their 'own invoice' issued in the name of the buyer without following Rule 173H, 173L, or 57F procedures. The Commissioner denied credit due to procedural lapses. However, the appellate member considered the appellant's submission that the goods were returned after clearance under Rule 57F1(ii) invoice, allowing the credit of Rs. 54,474. The failure to follow specific procedures may lead to penalties but does not warrant credit denial if eligibility is established.

Issue 3: Eligibility of credit on misplaced duty paying invoices
Credit on invoices misplaced in February 1995 was availed after the 6-month period. The appellate member noted that the credit was permissible as the duty payment documents were lost, and the appellant followed the prescribed procedure for credit availment, making the credit eligible within the deadline from the date of permission granted by the Asstt. Commissioner.

Issue 4: Reversal and re-availment of credit on repaired/reconditioned goods
The appellant reversed and re-availed credit on repaired/reconditioned goods without following specific procedures. The Revenue disputed the appellant's claim of goods being reconditioned/repaired and returned. However, the appellate member allowed the credit of Rs. 54,474, as the re-availment was justified under Rule 57F1(ii) invoice, even though procedural lapses could attract penalties but not credit denial if eligibility is established.

In conclusion, the appellate tribunal set aside the impugned orders, allowing the appeal with consequential relief based on the detailed analysis and findings on each issue presented during the proceedings.