1997 (9) TMI 293 - AT - Central Excise

Summary

Issues:
1. Dispensation of pre-deposit and penalty imposed on the appellants.
2. Denial of Modvat Credit on three grounds: credit taken on endorsed subsidiary gate pass, credit taken on endorsed invoice during a specific period, and undeclared inputs.

Analysis:
1. The stay application sought dispensation of pre-deposit and penalty. The duty amount was considered irregularly taken as Modvat Credit. The appellants were denied Modvat Credit on three grounds: credit taken on endorsed subsidiary gate pass, credit taken on endorsed invoice during a specific period, and undeclared inputs.

2. The appellants accepted the demand related to the endorsed subsidiary gate passes. Regarding the credit taken on endorsed invoices, the appellants argued that they followed the procedure under Notification 27/92 and pleaded for acceptance of the invoices without the need for endorsement. The Tribunal allowed Modvat Credit on endorsed invoices issued before 30-6-1994. The duty liability for the period after 30-6-1994 was contested, leading to a request for pre-deposit for that period.

3. The third element involved undeclared inputs received under a brand name. The appellants claimed the goods received matched the declaration but lacked evidence to support the claim. They agreed to pay the amount if unable to prove the goods' correlation with the declaration. The SDR did not object to this approach.

4. The Tribunal granted waiver of pre-deposit for the duty demanded in the impugned order. It held that the appellants were entitled to Modvat Credit on endorsed invoices up to 30-6-1994. The Tribunal referenced its earlier order allowing Modvat Credit on endorsed gate passes issued before 1-4-1994. The Tribunal also discussed the Modvat Credit taken beyond 30-6-1994 on endorsed invoices and upheld the appellants' entitlement based on compliance with Notification 27/92.

5. The Tribunal confirmed the appellants' acceptance of liability for the first element. Regarding the third element, if the goods received matched the declaration, the appellants would be entitled to Modvat Credit; otherwise, not. The penalty imposed on the appellants was reduced to Rs. 2,000 considering the amount due. The appeal was partially allowed with modifications to the penalty amount.