1997 (4) TMI 139 - AT - Central Excise

Summary

Issues:
Grant of Modvat credit for weighing machines, credit taken on defective invoices, credit taken on endorsed invoice of sister concern.

Grant of Modvat Credit for Weighing Machines:
The appeal concerned the grant of Modvat credit for weighing machines and credits taken on defective invoices and endorsed invoices of a sister concern. The Department conceded that the issue regarding weighing machines was covered against them by a previous Tribunal decision. The lower appellate authority allowed the Modvat credit after considering the necessity of weighment for manufacturing goods. The judge referenced the Supreme Court decision in CCE v. Rajasthan State Chemicals, emphasizing that weighment can be considered part of the manufacturing process. The judge cited Rule 57Q, explaining that capital goods include machinery, parts, and accessories used for manufacturing. The judge upheld the lower authority's decision, dismissing the department's appeal based on the wide interpretation of capital goods under Rule 57Q.

Credit Taken on Defective Invoices:
Regarding the credit taken on defective invoices, the lower authority allowed the Modvat credit despite minor omissions in the invoices. The Department argued that any omissions should be seriously considered, as per Rule 57G. However, the judge noted that the goods were ordered by the respondents, and any omissions were likely human errors. The judge held that substantive concessions should not be denied due to minor omissions, as long as the goods were ordered and verified to be the correct ones. Thus, the respondents were entitled to the Modvat credit, subject to verification.

Credit Taken on Endorsed Invoice of Sister Concern:
In the case of credit taken on an invoice showing the order from one unit and consignee as another unit, the lower authority allowed the Modvat credit. The Department acknowledged that the goods were ordered from the headquarters and required for a specific unit. The judge reasoned that as long as the consignee's name and particulars were correct, discrepancies in the invoice did not disentitle the Modvat credit. The judge emphasized that the ultimate consumer unit should receive the goods, regardless of the ordering unit. The judge upheld the lower authority's decision, dismissing the Revenue's appeal based on previous Tribunal decisions supporting Modvat credit under similar circumstances.