2000 (11) TMI 736 - AT - Central Excise

Summary

Issues:
- Dispute over Modvat credit for capital goods
- Denial of Modvat credit by Asstt. Commissioner
- Separate register maintenance by appellants
- Show cause notice for denial of Modvat credit and penalty
- Appeal against Asstt. Commissioner's order

Dispute over Modvat credit for capital goods:
The case involved a dispute regarding the eligibility of Modvat credit for capital goods. The Asstt. Commissioner initially allowed the benefit for some goods but rejected it for others. The Commissioner (Appeals) later remanded the case back to the Asstt. Commissioner, who again denied the credit for several capital goods. However, in a subsequent appeal, the Commissioner (Appeals) ruled in favor of the appellants, declaring all items eligible for Modvat credit except structures. The Tribunal upheld this decision, except for structures, which were sent back for further consideration.

Denial of Modvat credit by Asstt. Commissioner:
During the pendency of the appeal process, the appellants maintained a separate register for disputed capital goods. The Asstt. Commissioner issued a show cause notice proposing to deny Modvat credit and impose a penalty. The Commissioner (Appeals) set aside the Asstt. Commissioner's order, leading to the current appeal. The Revenue contended that Modvat credit was wrongly claimed without proper acknowledgment and timely intimation to the range officer. However, the Tribunal found that the appellants had filed declarations with dated acknowledgments and that delays in intimation were condoned by the Asstt. Commissioner, thus rejecting the Revenue's arguments.

Separate register maintenance by appellants:
The appellants explained that they maintained a separate register for disputed capital goods to avoid future issues if their appeals succeeded. They clarified that entries in regular registers were made only after receiving favorable orders. The Tribunal agreed with the appellants, stating that maintaining a separate register did not justify denying Modvat credit. It was noted that the separate account was maintained with proper intimation to the range superintendent, and there was no evidence of any malafide intent on the part of the appellants.

Show cause notice for denial of Modvat credit and penalty:
The show cause notice issued by the Asstt. Commissioner proposed denying Modvat credit and imposing a penalty on the appellants. However, the Commissioner (Appeals) set aside this order, leading to the current appeal. The Tribunal, after considering the arguments and explanations presented, found no merit in the Revenue's contentions and upheld the Commissioner (Appeals)' decision, rejecting the Revenue's appeal.

In conclusion, the Tribunal found no infirmity in the Commissioner (Appeals)' order and rejected the Revenue's appeal, thereby settling the dispute over Modvat credit for the capital goods in question.