1997 (6) TMI 199 - AT - Central Excise

Summary

Issues:
- Availment of Modvat credit in respect of imported goods
- Compliance with Rule 57G(2) of the Central Excise Rules, 1944
- Utilization of credit before receipt of duty paying documents
- Interpretation of relevant duty paying documents
- Applicability of Trade Notice No. 17/87
- Mis-utilization of credit
- Imposition of penalty

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the availment of Modvat credit by M/s. Shiva Stampings Pvt. Ltd. in relation to imported steel sheets based on certificates issued by the Superintendent of Central Excise. The issue arose when it was alleged that the imported goods were not received by the appellants under the cover of the certificate, leading to a potential violation of Rule 57G(2) of the Central Excise Rules, 1944. The appellants contended that they had not utilized the credit before the certificate date and cited relaxation by the Central Board of Excise & Customs in allowing credit utilization only after receipt of duty paying documents.

The Tribunal considered the submissions made by both parties. The appellant's representative referred to the prescribed procedure for issuing subsidiary certificates against Bill of Entry and highlighted that they utilized the credit only after the Superintendent of Central Excise issued the certificates as per Trade Notice No. 17/87. The appellant also relied on a Tribunal decision in a similar case to support their position. On the other hand, the Revenue representative argued that the goods were received without the necessary duty paying documents, supporting the lower authorities' decision.

Upon careful consideration, the Tribunal analyzed the relevant provisions and noted that the credit was indeed utilized after the issuance of certificates by the Superintendent of Central Excise. There was no dispute regarding the receipt or utilization of inputs, and duty payment upon importation. However, it was observed that some requirements of the Trade Notice were not fully complied with, and irregularities were found in the movement of goods under certain bills. Despite no mis-utilization of credit being alleged, a penalty of Rs. 5,000 was deemed justified due to these irregularities.

In conclusion, the Tribunal allowed the appeal concerning the demand of duty but confirmed the imposition of the penalty. The judgment emphasized the importance of compliance with procedural requirements and the necessity of proper documentation in availing Modvat credit to avoid penalties despite the correct utilization of credit.