1999 (9) TMI 367 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit on countervailing duty paid on imported goods.
2. Retrospective application of Notification No. 11/95-C.E.
3. Verification of installation of imported goods as capital goods in the factory at Sahibabad.

Analysis:

Issue 1: Denial of Modvat credit on imported goods
The case involved the denial of Modvat credit on countervailing duty paid on imported goods by the lower authorities. The appellant, a division of a company with a factory in Calcutta, imported goods for setting up a plant in Sahibabad. The lower authorities argued that since the goods were imported by the head office in Calcutta, Modvat credit could not be granted to the appellants. Additionally, they found discrepancies in the documentation regarding the description of goods, leading to the denial of Modvat credit.

Issue 2: Retrospective application of Notification No. 11/95-C.E.
The lower appellate authority observed that Notification No. 11/95-C.E. was to be treated as clarificatory and applied retrospectively. The Revenue appealed against this observation, while the assessee appealed against another portion of the order. The Advocate for the appellant argued that the head office's name in the documents did not warrant denial of Modvat credit, citing a Tribunal judgment. The Advocate also highlighted procedural lapses in document submission but emphasized the substantive benefit of Modvat credit.

Issue 3: Verification of installation of imported goods as capital goods
The Advocate contended that despite procedural discrepancies, the imported goods had been installed as capital goods in the Sahibabad factory, making them eligible for Modvat credit. The Revenue, however, argued that insufficient declaration in the bill of entry and absence of specific declarations regarding Modvat credit at the Calcutta factory justified the denial of credit. The Tribunal agreed with the appellant's Advocate, emphasizing the installation of goods as capital goods in Sahibabad and directed further verification before allowing Modvat credit.

In conclusion, the Tribunal allowed the appeal of the appellant, directing the extension of Modvat credit subject to verification of goods' installation as capital goods in the Sahibabad factory. Regarding the Revenue's appeal on the retrospective application of Notification No. 11/95-C.E., the Tribunal followed precedent and disposed of the appeal accordingly.