2005 (10) TMI 201 - AT - Central Excise

Summary

Issues involved: Interpretation of Modvat credit rules for input duty credit based on consignee information in invoices.

Summary:

Issue 1: Validity of Modvat credit based on consignee information in invoices

The case involved M/s. Chemplast Sanmar Limited, where plant I took Modvat credit on inputs based on invoices addressed to plants II and III, not to plant I. The department disputed the validity of these invoices for input duty credit by plant I. Show-cause notices were issued, disallowing the credit and imposing a penalty. The first appellate authority overturned the decision, stating that input credit cannot be denied to a manufacturing unit of a company solely because the invoice shows another unit as the consignee, as long as there is no dispute regarding receipt and utilization of the input in the credit-taking unit's final product manufacture. The decision in the case of L & T Ltd v. CCE was cited, where a similar situation was resolved in favor of the taxpayer. The Tribunal found the precedent applicable to the present case, despite the Revenue's argument that a reference application had been filed challenging the L & T Ltd. decision.

Decision:

The Tribunal affirmed the impugned order, dismissing the Revenue's appeal. The operative portion of the order was pronounced on 3-10-2005.