1998 (11) TMI 335 - AT - Central Excise

Summary

Issues:
1. Modvat credit validity based on certificate issuance date.
2. Disallowance of Modvat credit by Commissioner (Appeals).
3. Genuineness of duty paying documents and their connection with inputs.
4. Application of Trade Notice in the case.

Analysis:
1. The appeal involved a dispute regarding the Modvat credit taken by the appellants based on a certificate issued by the Superintendent. The Revenue contended that the certificate was issued after the inputs were received, which was impermissible. The Assistant Commissioner dropped the show cause notice, citing lack of evidence linking the inputs and duty payment documents. However, the Commissioner (Appeals) accepted the Revenue's appeal, questioning the relation between the inputs and the certificate issuance date.

2. The learned Consultant argued that the Commissioner (Appeals) based the decision on assumptions, emphasizing that the credit was taken only after receiving the certificate. Referring to a Trade Notice allowing credit after receiving duty paying documents, the Consultant clarified that the inputs were not utilized before taking credit, despite entering them in RG-23A Part-I earlier. The Commissioner's doubt lacked evidential support, and the Assistant Commissioner's reasoning on the certificate's genuineness was deemed appropriate.

3. The Revenue's representative highlighted doubts on the genuineness of duty paying documents and their connection to the inputs, supporting the disallowance of Modvat credit. However, the Tribunal found the Commissioner's doubt to be presumptive, lacking concrete evidence. The Tribunal emphasized the significance of the certificate issued under Rule 57G after verifying duty paying documents, indicating that unless evidence suggested a violation, such certificates should be considered valid.

4. After considering both parties' submissions, the Tribunal concluded in favor of the appellants. The Tribunal found merit in the Consultant's arguments, noting the lack of evidence supporting the Commissioner's doubt. The Tribunal upheld the Assistant Commissioner's observation on the certificate's authenticity and compliance with Rule 57G, ultimately allowing the appeal and granting consequential reliefs to the appellants.