2015 (10) TMI 1695 - AT - Central Excise

Reversal of modvat credit - credit availed on 57E certificates issued by the Customs for payment of CVD after the amendment of Section 57F (4A) w.e.f16.3.95 - ineligible document issued by the supplier who is not registered with Central Excise - Held that - appellants have availed modvat credit of ₹ 1,14,005/- on three invoices all dated 6.8.96 issued by M/s. Bihar Alloys Steels Ltd. On perusal of the letter OC No.535/96-97 dt.30.7.96 issued by the jurisdictional Superintendent Range IX F addressed to the appellant the Superintendent informed the appellant that supplier M/s. Bihar Alloy Steels Ltd. is availing notification No.27/92-(CE-NT) dt.9.10.92 and the supplier has authorised M/s. Global Steels Pvt. Ltd. who actually fabricates the goods for M/s. Bihar Alloys Steels Ltd. and complied with all Central Excise formalities under Central Excise and Salt Act, 1944. The Range Superintendent also certified that even though M/s. Bihar Alloy Steels Ltd. is not registered under his range and does not have a e.c.c. code number, they are eligible to remove the goods under their invoices based on which they party buying the said goods can take modvat credit. - invoice issued by the supplier who is exempted from taking registration is a valid document. Further, I find that there is no dispute on the payment of Central Excise duty on the inputs. Accordingly, the appellants are eligible for credit - demand of ₹ 19,50,097/-is upheld. Demand of reversal of modvat credit of ₹ 1,14,005/- is set aside - Decided partly in favour of assessee.

Summary

Issues:
1. Denial of modvat credit availed on 57E certificates issued by Customs post-amendment.
2. Denial of modvat credit on ineligible document issued by non-registered supplier.

Analysis:

Issue 1: Denial of modvat credit on 57E certificates issued by Customs post-amendment
The appellant contested the denial of modvat credit amounting to Rs. 19,50,097 based on certificates issued by Customs after the introduction of Rule 57F (4A). The appellant cited past Tribunal decisions in their favor, but the Tribunal rejected their appeal, emphasizing the lack of evidence of fresh duty payment after the specified date. The Tribunal highlighted that the certificates issued were for lapsed credits, not for post-amendment duty payments. Consequently, the appellant was deemed ineligible for the credit, as per the Tribunal's previous rulings.

Issue 2: Denial of modvat credit on ineligible document issued by non-registered supplier
Regarding the denial of modvat credit on three invoices from a non-registered supplier, the appellant argued that the supplier was exempted from registration and had fulfilled all Central Excise formalities. The appellant presented a letter from the jurisdictional Range Superintendent confirming the supplier's eligibility for availing the credit under Notification No.27/92. The Tribunal noted that the invoices clearly indicated the exempted supplier's details and that the appellant had paid Central Excise duty on the inputs. Consequently, the Tribunal ruled in favor of the appellant, allowing the credit of Rs. 1,14,005.

In conclusion, the Tribunal upheld the demand of Rs. 19,50,097 while setting aside the demand for reversal of modvat credit of Rs. 1,14,005. The impugned order was modified accordingly, partially allowing the appeal.