1999 (6) TMI 202 - AT - Central Excise

Summary

Issues Involved:
1. Availability of Modvat credit on duty-paid MCI Inserts received free-of-cost.
2. Validity of invoices as proper documents for availing Modvat credit.

Summary:

Issue 1: Availability of Modvat Credit on Duty-Paid MCI Inserts
The appellants, manufacturers of R.C.C. Sleepers, received MCI Inserts free-of-cost from South Central Railway and used them in the manufacturing process. The primary contention was whether the appellants could avail Modvat credit on these Inserts, given that the duty was paid by the Railways. The Tribunal held that ownership of inputs is irrelevant for Modvat credit eligibility. The agreement between the Railways and the appellants, which adjusted the price of Sleepers to account for the duty on Inserts, supported the appellants' claim. The Tribunal emphasized that the Modvat scheme does not require the manufacturer to be the owner of the inputs, and thus, the appellants were entitled to the credit.

Issue 2: Validity of Invoices as Proper Documents for Availing Modvat Credit
The dispute also involved whether the invoices, which mentioned both the Railways and the appellants, were valid documents for Modvat credit. The Tribunal noted that the invoices clearly indicated the appellants' name and address, fulfilling the essential requirements of a duty-paying document. Citing precedents, the Tribunal concluded that minor procedural discrepancies should not deny substantive rights to Modvat credit. The invoices, despite showing the Railways as the purchaser, were valid since they established a clear link between the goods and the appellants.

Conclusion:
The Tribunal set aside the Orders-in-Appeal, allowing the appeals with consequential relief. The judgment clarified that ownership of inputs is not a prerequisite for Modvat credit and validated the invoices as proper documents under the Modvat scheme.