2003 (2) TMI 144 - AT - Central Excise

Summary

Issues:
Challenging the allowance of Modvat credit on disputed amount for MS structures and other goods detailed in show cause notice.

Analysis:
The appeal concerns the Revenue challenging the Commissioner (Appeals) order allowing Modvat credit on disputed amount for MS structures and other goods. The respondents claimed Modvat credit on capital goods for setting up a Plant for manufacturing VP sugar, including sugar mill machinery, boilers, structures, pipes, etc. The adjudicating authority disallowed a portion of the credit, leading to the appeal. The Commissioner (Appeals) reversed the order-in-original, allowing the Modvat credit on the disputed amount. The key issue revolved around the Modvat credit claimed on steel structures and goods covered by specific invoices.

The learned JDR argued against allowing Modvat credit on steel structures and goods specified in the invoices, while the Counsel supported the Commissioner (Appeals) decision. Upon review, the Commissioner (Appeals) justified allowing Modvat credit on steel structures used for factory installation, not civil construction, citing Global Sugar Ltd. v. Commissioner of Central Excise, Kanpur. The Tribunal's precedent supported Modvat credit on capital goods like steel structures. The argument against Modvat credit based on Rosa Sugar Works v. CCE, Kanpur was dismissed as the structures were used for VP sugar plant installation, distinguishing them from mere fabrication purposes.

Regarding the validity of invoices for Modvat credit, the Revenue contended that the documents were invalid. However, the respondents had submitted an application and affidavit for Modvat credit, indicating the loss of duplicate copies. The utilization of duty paid goods for manufacturing final products was undisputed. The Commissioner (Appeals) rightly allowed Modvat credit based on the disputed invoices, noting that the relevant Rule allowed credit on original invoices at the time of transactions preceding the amendment.

Ultimately, the Tribunal found no illegality in the Commissioner (Appeals) order and upheld it, dismissing the Revenue's appeal for lacking merit. The decision rested on the proper application of Modvat credit rules to the specific circumstances of the case, supported by legal precedents and procedural compliance.