2006 (7) TMI 19 - AT - Central Excise

Central Excise Cenvat/Modvat credit Credit cannot be denied on the ground of obtaining credit again by mis-declaring date of receipt Eligible to credit

Summary

Issues:
1. Availment of modvat credit without filing declaration.
2. Allegation of re-crediting modvat credit after change in rules.
3. Denial of modvat credit based on statutory records.
4. Interpretation of Rule 57G of Central Excise Rules.
5. Eligibility of modvat credit even without filing declaration.
6. Dispute regarding receipt of material post-01.04.2000.

Analysis:
1. The appeal challenged an order allowing modvat credit to the respondent, who availed credit on input on 24.03.2000. Authorities reversed the credit on 08.04.2000 due to lack of declaration. Subsequently, the respondent re-availed credit on 31.08.2000, leading to a show cause notice and penalty imposition. Commissioner (Appeal) set aside the original order, prompting the department's appeal.

2. The Department argued that the respondent misrepresented in statutory records while re-availing modvat credit on 31.08.2000. They alleged that the respondent tried to avail ineligible credit by indicating receipt of goods post-01.04.2000. The Department contended that the declaration filed by the respondent differed from the actual inputs.

3. The respondent's advocate countered by citing the amendment to Rule 57G, allowing credit even without full details in documents. The advocate argued that the denial of credit based on the lack of declaration was incorrect during the relevant period.

4. The Tribunal analyzed the amended Rule 57G, referencing a previous case interpretation. The Tribunal clarified that even without a declaration, if duty on inputs was paid and they were used in manufacturing, credit could be availed. It was established that the disputed inputs were duty paid and consumed in the factory.

5. The Tribunal dismissed the Department's concerns about misstatements regarding material receipt post-01.04.2000, emphasizing the eligibility of the respondent for modvat credit initially. Considering all aspects, the Tribunal upheld the Commissioner (Appeal)'s decision, dismissing the Department's appeal.

6. The judgment highlighted the importance of duty payment on inputs and their utilization in manufacturing for availing modvat credit, irrespective of declaration filing. The Tribunal's decision emphasized adherence to statutory provisions and eligibility criteria for credit availment, ultimately maintaining the Commissioner (Appeal)'s ruling.