2004 (11) TMI 248 - AT - Central Excise

Summary

Issues: Denial of Modvat credit on electrodes and steel forgings

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the main issue involved is the denial of Modvat credit to the appellants on electrodes and steel forgings. The Tribunal upheld the denial of Modvat credit on electrodes based on a previous decision in the case of Jaypee Rewa Plant, where it was held that credit on these goods is not permissible under the law. However, regarding steel forgings, the Tribunal found that the denial of Modvat credit on the grounds of non-filing of declaration cannot be sustained. The Tribunal referred to the amended provisions of Rule 57G of the Rules and a previous decision in the case of Kamakhya Steels, where it was held that if there is no dispute regarding the duty paid nature of the goods and their utilization in the manufacture of the final product, the credit could not be denied. Therefore, the impugned order disallowing Modvat credit on steel forgings was set aside.

Furthermore, the Tribunal considered the contention of the appellants for setting aside the penalty imposed. The appellants argued that there were conflicting judgments prior to the Larger Bench decision in the Jaypee Rewa Plant case, where Modvat credit on electrodes was deemed admissible. The Tribunal acknowledged the change in law brought about by the Larger Bench decision and held that under such circumstances, the penalty imposed on the appellants was not warranted. Consequently, the penalty was set aside.

In conclusion, the impugned order was modified, and the appeal of the appellants was disposed of accordingly. The judgment highlights the importance of adherence to legal provisions and precedents in determining the admissibility of Modvat credit on specific goods, emphasizing the need for consistency in judicial decisions to avoid confusion and ensure fair treatment of taxpayers.