2000 (8) TMI 871 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat Credit on Malleable Cast Iron Inserts received directly from the manufacturer.
2. Availment of Modvat Credit on cement purchased from another entity.

Analysis:

Issue 1: Availment of Modvat Credit on Malleable Cast Iron Inserts
The appellants received Malleable Cast Iron Inserts directly from the manufacturer under the cover of invoices issued under Rule 52A. The invoices showed the consignee as the Inspector of Works, Concrete Sleepers, Jagiroad, N.F. Railways, but the address was that of the appellants. The appellants availed Modvat Credit of the duty paid on these Inserts based on the manufacturer's invoices. The Tribunal noted that the appellants received the goods directly and used them in manufacturing their final product. Since the value of the Inserts was added to the final product and duty had been paid on them, the appellants were entitled to the Modvat Credit. The Tribunal held that this was not a case of invoice endorsement, as the goods were received directly by the appellants under the direction of the Railways without the need for endorsement by the Railways. The Tribunal distinguished this case from the Balmer & Lawrie decision, stating that the peculiar facts of this case made the decision inapplicable.

Issue 2: Availment of Modvat Credit on Cement
The appellants purchased cement from M/s. Larsen & Toubro (L&T) and availed Modvat Credit on the duty paid. L&T issued invoices under Rule 52A from their factory in Maharashtra and transferred the material to their Calcutta office. The Calcutta office then raised invoices on the appellants, endorsing that the entire quantity had been delivered. The Tribunal found that this was not a case of endorsement by an intermediary receiver, as the endorsement was done by L&T's own office in Calcutta. Therefore, the denial of Modvat Credit on the cement was deemed unjustified. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential reliefs to the appellants.

In conclusion, the Tribunal ruled in favor of the appellants, allowing the Modvat Credit on both the Malleable Cast Iron Inserts and the cement, based on the specific circumstances and legal provisions governing the transactions.