1998 (6) TMI 179 - AT - Central Excise

Summary

Issues involved:
Several issues relating to Modvat credit are involved in this appeal.

Issue 1 - Modvat credit on packing and forwarding charges:
The lower authorities denied Modvat credit on inputs to the extent of duty paid on packing and forwarding charges, stating that packing charges were not a normal feature of the inputs. The appellant argued that such charges are part of the input price and should be allowed as Modvat credit. The Tribunal held that Modvat credit of duty paid on inputs should not be disallowed based on the nature of charges, as Rule 57A allows credit for duty paid on inputs received by a Modvat assessee for use in manufacturing final goods. The Tribunal emphasized that authorities cannot challenge assessments made by input suppliers' jurisdiction over the manufacturer of final products. Therefore, the appeal was allowed on this issue.

Issue 2 - Modvat credit on invoice name discrepancy:
Modvat credit of Rs. 1,700 on an invoice addressed to Union Carbide India but with the appellant's factory address at Lucknow was denied because the invoice bore the name of Union Carbide India, not the appellant. The Tribunal found this reason unsatisfactory as there was no evidence that the factory was not a unit of the appellant, who had changed their name. Hence, Modvat credit was deemed admissible in this case.

Issue 3 - Modvat credit on specific input with brand name:
Modvat credit on an input named 'Unikleen II' was disallowed as the brand name was not declared under Rule 57G. The Tribunal ruled that as long as the chemical name and tariff heading were declared under Rule 57G, the specific brand name did not need to be declared. Therefore, the appeal on this issue was allowed.

Issue 4 - Modvat credit on spares of D.G. sets:
Modvat credit on spares of D.G. sets was disallowed as the explanation to Rule 57Q(1)(c) mentioned 'D.G. sets' but not their spares. The appellant argued that components of machinery under Rule 57Q(1)(a) should be entitled to Modvat credit. The Tribunal held that D.G. sets mentioned in clause (c) were covered under the general definition in clause (a), and therefore, spares or components of D.G. sets fell under clause (b) of the Explanation. The Tribunal also noted that the late filing of declaration was a minor procedural lapse and should not result in denial of Modvat credit. Consequently, the appeal was allowed on this issue.

Conclusion:
The appeal was allowed concerning the admissibility of Modvat credit on various counts, leading to no imposition of penalties. The appellants were granted consequential relief as a result of the appeal being allowed.