2002 (2) TMI 221 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the eligibility of Modvat credit on capital goods received during a specific period, the interpretation of relevant notifications, and the applicability of the date of installation for claiming Modvat credit.

Eligibility of Modvat Credit:
The appellant, a cement manufacturer, took Modvat credit on capital goods received between 23-7-96 and 31-8-96. The goods were excluded from Modvat credit under Notification No. 14/96 but included under Notification No. 25/96 w.e.f. 31-8-96. The appellant argued that eligibility should be continuous to avoid discrimination. However, the Tribunal held that Modvat credit eligibility arises at the date of receipt, not installation, and as the goods were excluded between 23-7-96 and 31-8-96, the credit was correctly denied.

Interpretation of Notifications:
The Tribunal examined the notifications and case laws cited by the appellant. It noted that the notifications excluded the goods from Modvat credit for a specific period. The Tribunal emphasized that the date of eligibility for Modvat credit is crucial, and in this case, the goods were ineligible between 23-7-96 and 31-8-96. The Tribunal distinguished previous cases cited by the appellant, highlighting the specific circumstances and clarificatory nature of the notifications.

Applicability of Date of Installation:
The appellant argued that Modvat credit eligibility should be based on the date of installation, which was after 31-8-96 when the goods became eligible. However, the Revenue contended that credit accrues at the date of receipt, not installation. The Tribunal agreed with the Revenue, stating that the date of receipt determines eligibility, and installation is a deferred date for administrative purposes. As the goods were excluded between 23-7-96 and 31-8-96, the denial of Modvat credit was upheld.

Separate Judgment by Judges:
The judgment was delivered by S/Shri G.R. Sharma, Member (T) and P.S. Bajaj, Member (J). The Tribunal upheld the impugned order denying Modvat credit and penalty, emphasizing the importance of the date of receipt for determining eligibility, and rejecting the appellant's arguments based on installation dates and previous case laws.