1998 (1) TMI 168 - AT - Central Excise

Summary

Issues: Revenue's appeal against order-in-appeal, Modvat credit availed without entry in statutory records, mandatory maintenance of RG 23A Part I register, entitlement to Modvat credit, procedural infraction vs. substantive benefit, confirmation of demand based on lack of entry in RG 23A Part I register, conditions for availing Modvat credit, verification of records, entitlement to Modvat credit despite lack of entry in register, comparison with precedent cases, verification of receipt and use of inputs, dismissal of appeal by Tribunal.

The judgment pertains to a Revenue appeal against an order-in-appeal issued by the Collector, Central Excise (Appeals), Ghaziabad. The appeal challenges the availing of Modvat credit by the respondents without making entries in the statutory records in the form of RG 23A Part I register. The appellant argues that maintaining records in RG 23A Part I is mandatory for claiming Modvat credit. The respondent, represented by an advocate, contends that despite the procedural infraction of not entering inputs in the register, the substantive benefit of duty should not be disallowed. The Commissioner (Appeals) found that the inputs were received and used for manufacturing final products, satisfying Modvat credit requirements.

The Commissioner (Appeals) emphasized the mandatory nature of maintaining the RG 23A Part I register for availing Modvat credit but highlighted that disallowing credit solely based on the lack of entry should consider other conditions stipulated in the Modvat rules. The Commissioner verified various records to confirm the receipt and use of inputs, concluding that the Modvat credit was legally admissible to the appellants despite the absence of entries in the register. The Tribunal differentiated this case from precedent cases where goods were confiscated due to discrepancies in record-keeping, emphasizing that in the present case, no such confiscation occurred.

The Tribunal noted that in a similar case involving the respondents, the Tribunal had ruled that substantive compliance with provisions entitles the assessee to Modvat credit even if entries were not made in the RG 23A Part I register. The Tribunal upheld the Commissioner (Appeals)'s findings that there was no doubt regarding the receipt and utilization of inputs in manufacturing final products. Consequently, the Tribunal found no merit in the Revenue's appeal and dismissed it, affirming the entitlement of the appellants to the Modvat credit despite the procedural lapse in record-keeping.