2002 (2) TMI 1143 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit for Special Excise Duty on concentrate for aerated water.
2. Interpretation of Rule 57A of the Central Excise Rules, 1944 regarding the date relevant for availment of Modvat credit.
3. Consideration of the plea of vested right in claiming Modvat credit.
4. Application of Sub-rule (5) of Rule 57G in determining the period of limitation for availment of inputs-credit.

Admissibility of Modvat Credit:
The appellants had taken Modvat credit of Special Excise Duty on concentrate for aerated water in March 2000. The authorities denied the credit, citing an amendment that excluded the input from specified inputs for Modvat purpose. The appellants argued that the right to take Modvat credit vests on the date of invoice issuance by the input manufacturer. The plea of vested right was raised but not adequately considered by the lower appellate authority. The Tribunal noted the significance of the date of issue of the Modvat document and remanded the case for further examination.

Interpretation of Rule 57A:
The appellants contended that the date of the invoice is crucial for determining the admissibility of Modvat credit under Rule 57A. They asserted that the manufacturer gains the right to take Modvat credit on the date of invoice issuance. The Tribunal highlighted the importance of the date of issue of the Modvat document in determining the period of limitation for availing inputs-credit. The lower appellate authority was directed to reexamine this issue in line with legal principles and natural justice.

Plea of Vested Right:
The plea of vested right was central to the appellants' argument, emphasizing that the date of invoice issuance determines the vested right to take credit and utilize it for duty payment on final products. The Tribunal acknowledged that this plea was not adequately addressed by the lower appellate authority, indicating a lack of proper consideration. The Tribunal set aside the previous order and allowed the appeal for further review based on the plea of vested right.

Application of Rule 57G Sub-rule (5):
Sub-rule (5) of Rule 57G establishes a six-month limitation period for availing inputs-credit, calculated from the date of issue of the Modvat document. While the date of issue of the Modvat document holds significance, its relevance to the present case's specifics required further examination. The Tribunal directed the lower appellate authority to assess this aspect in compliance with legal provisions and principles of natural justice, leading to a remand of the case for detailed consideration.