2002 (6) TMI 150 - AT - Central Excise

Summary

Issues:
Entitlement to Modvat credit at 75% or 100% of CVD paid on imported goods.

Analysis:
The case involved a dispute regarding the entitlement of Modvat credit at 75% or 100% of CVD paid on imported goods. The respondent, a cement manufacturer, imported capital goods under the Project Import Scheme in 1996. Initially, Chapter Heading 98.01 was not specified under Rule 57Q. However, w.e.f. 1-3-97, Chapter Heading 98.01 was specified under Rule 57Q. The Revenue argued that since the capital goods were installed after 1-4-97, the Modvat credit should be restricted to 75% of CVD paid. The Revenue contended that the Commissioner wrongly allowed excess credit to the respondent and misinterpreted certain circulars. The respondent, on the other hand, argued that the goods were imported before 1-3-97, and the condition imposed thereafter should not be applicable. They cited various tribunal decisions and circulars to support their contention that the date of receipt of goods determines Modvat credit eligibility.

The Tribunal analyzed the submissions and case laws cited by both parties. They noted that the key issue was whether the respondent was entitled to Modvat credit at 75% or 100% of CVD paid on imported goods. The Tribunal emphasized that the date of receipt of goods in the factory is crucial for Modvat credit eligibility under Rule 57Q. They highlighted that there was no restriction on the quantum of duty for Modvat credit before 1-3-97, and as the goods were received in the factory before that date, the respondent was entitled to 100% Modvat credit from the date of receipt of goods. The Tribunal also referenced a Board's circular supporting this view.

After careful consideration, the Tribunal concluded that the respondent was entitled to Modvat credit at 100% of CVD paid on imported goods from the date of receipt in the factory. They found no reason to interfere with the impugned order and upheld it, rejecting the Revenue's appeal.