2002 (3) TMI 188 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case are the invocation of a larger period under Section 11A of the Central Excises Act, 1944 read with Rule 57U(6)/57AH of Central Excise Rules, 1944, and the denial of Modvat credit to the appellants for goods received from another company.

Summary:

Invocation of Larger Period:
The appeal was filed by M/s. Sharda Motors Industries Ltd. against the order of the Commissioner, who invoked a larger period under Section 11A of the Central Excises Act, 1944. The Commissioner confirmed a demand of Rs. 21,99,959/- and imposed penalties under Section 11AC and Rules 57U/57AH of the Central Excise Rules, 1944.

Denial of Modvat Credit:
The appellants, manufacturers of automobile components, were availing Cenvat credit under Rule 57AA of the Central Excise Rules for goods received from M/s. Hyundai Motor India Ltd. The Department alleged that the appellants were not entitled to Modvat credit on certain goods as they were not owned by them. The appellants argued that they fulfilled all requirements for taking Modvat credit and cited relevant case laws to support their claim.

Court's Decision:
The Tribunal noted that the Central Board of Excise & Customs had clarified that Modvat credit could be taken for goods sent to job workers. As the appellants had complied with all formalities for taking Modvat credit, and there was no suppression of facts, the Department could not demand duty for a period beyond six months. Therefore, the appeal was allowed on both merit and limitation grounds, providing consequential relief to the appellants as per the law.

This judgment highlights the importance of compliance with formalities for claiming credits and the significance of relevant clarifications issued by the regulatory authorities in interpreting tax laws.