2004 (1) TMI 269 - AT - Central Excise

Summary

Issues:
- Appeal against order-in-appeal passed by Commissioner (Appeals) regarding Modvat credit denial
- Interpretation of Modvat Scheme provisions
- Compliance with Trade Notice No. 62/99 for decoiling and cutting coils into sheets
- Classification of goods and Modvat credit eligibility

Analysis:
1. The appeals were filed by Revenue against the order-in-appeal passed by the Commissioner (Appeals) regarding the denial of Modvat credit. The Commissioner (Appeals) allowed the appeals based on a Board's circular dated 13-2-95.

2. The show cause notices were issued to the respondents denying Modvat credit on the basis that the registered dealer did not purchase the goods in the registered premises and received C.R. coils/strips, while the respondents claimed credit on C.R. sheets. The Revenue contended that the dealer violated Modvat Scheme provisions by not buying the goods in their registered premises.

3. It was found that the dealer received C.R. coils, kept them where a cutter was installed, and supplied sheets to the respondents after cutting. A Trade Notice No. 62/99 dated 16-10-99 clarified the procedure for registered dealers to decoil coils into sheets. The notice emphasized maintaining proper accounts for outgoing coils and incoming sheets, ensuring no change in tariff classification during cutting.

4. The Tribunal noted that as per the Trade Notice, there was no merit in Revenue's contention that the goods were not brought to the dealer's registered premises. Additionally, the Revenue did not seek duty on cutting coils into sheets after decoiling, as covered by the Trade Notice. The Tribunal found that the cutting should not change the tariff classification, and since the Revenue did not claim such changes occurred, Modvat credit for the issued invoices could not be denied.

5. Consequently, the appeals of the Revenue were dismissed by the Tribunal, upholding the decision based on the interpretation of the Modvat Scheme provisions and compliance with Trade Notice No. 62/99 for the classification of goods and eligibility for Modvat credit.