1999 (11) TMI 228 - AT - Central Excise

Summary

Issues:
- Waiver of pre-deposit of duty amount
- Validity of duty-paying documents for Modvat credit
- Recognition of testing equipment as capital goods for Modvat credit

Waiver of Pre-Deposit of Duty Amount:
The appeal sought waiver of pre-deposit of Rs.14,370 and stay of recovery during the appeal against the Commissioner's order confirming the duty demand. The adjudicating authority had disallowed the credit based on certain invoices and testing equipment classification. The Tribunal observed that there was no serious objection to accepting the invoices as valid duty-paying documents. The learned Consultant highlighted this aspect, citing relevant judicial precedents. The Tribunal, inclined to follow previous decisions, found it incorrect in law to reject the invoices for Modvat credit, considering the goods' receipt, utilization, and duty payment.

Validity of Duty-Paying Documents for Modvat Credit:
The Tribunal examined the invoices and noted that there was no dispute regarding goods receipt, utilization, and duty payment. The learned Advocate referenced Tribunal decisions and other judicial authorities to support the acceptance of the invoices for Modvat credit. Despite the Department's objections and reliance on Central Excise Rules, the Tribunal found it prima facie incorrect to reject the invoices for Modvat credit. The Tribunal emphasized the duty-paying character of the transaction and the utilization of goods in the factory, supporting the waiver of pre-deposit.

Recognition of Testing Equipment as Capital Goods for Modvat Credit:
Regarding the testing equipment's classification as capital goods for Modvat credit, the Tribunal referred to a previous order involving the same applicants where testing machines were considered capital goods. The Tribunal found no better judicial authority presented by the Department on this matter. Relying on the previous order, the Tribunal held that the applicants had a strong prima facie case for Modvat credit on testing machines during the period in question. Consequently, the Tribunal granted a complete waiver of pre-deposit and ordered a stay on recovery during the appeal, scheduled for regular hearing on 19-1-2000.