1997 (4) TMI 268 - AT - Central Excise

Summary

Issues:
1. Applicability of extended period of limitation for availing Modvat credit without production of documents evidencing payment of duty on inputs.
2. Admissibility of Modvat credit on individual inputs such as aluminium wires, steel strips, steel wires, PVC resins, PVC compound, and copper wires.

Analysis:

1. Applicability of Extended Period of Limitation:
The judgment addresses the issue of the extended period of limitation for availing Modvat credit without proper documentation. The tribunal ruled that the demand for the period from March to August 1986 is time-barred as the show cause notice did not allege wilful misstatement, collusion, or suppression. Since the notice was issued by the Superintendent of Central Excise and not within the normal six-month limitation period, the demand for this period was deemed time-barred.

2. Admissibility of Modvat Credit on Individual Inputs:
a. Aluminium Wires:
The tribunal found that the demand on aluminium wires for the period from March to June 1986 was beyond the limitation period and thus barred.
b. Steel Strips & Steel Wires:
For steel strips and wires, the demand for the period from March to August 1986 was time-barred. However, for the subsequent period, the tribunal disallowed Modvat credit as the inputs were purchased from a manufacturer and not the open market, without evidence of duty payment. A specific duty amount of Rs. 2739.56 was upheld for payment by the appellants.
c. PVC Resins and PVC Compound:
Regarding PVC resins and compounds, the tribunal held that the credit was correctly availed by the assessees. The credit was taken based on manufacturers' duty-paying documents, as per Notification 198/86-C.E., allowing credit for specified duty paid on inputs used in the manufacturing process.
d. Copper Wires:
The judgment referred to a previous case law to determine the admissibility of Modvat credit on copper wires. Following the precedent, the tribunal held that the assessees were entitled to take credit on copper wires based on the duty paid at both primary and product stages.

In conclusion, the tribunal upheld a specific duty demand on steel strips and wires for a certain period, while setting aside the rest of the demand. The appeal was disposed of accordingly.