1994 (5) TMI 93 - AT - Central Excise

Summary

Issues:
1. Admissibility of MODVAT Credit for Iron & Steel Scrap and Ship Breakings after amendment.
2. Interpretation of the crucial event for availing Credit.
3. Comparison with previous legal decisions on MODVAT Credit time limits.

Analysis:
1. The appeal was filed against the Collector (Appeals) upholding the decision that MODVAT Credit for Iron & Steel Scrap and Ship Breakings was not admissible post-amendment. The Collector held that the deemed Credit facility for these items was withdrawn by a notification, making the Credits taken after the amendment inadmissible. The appellants argued that the crucial event for Credit was the receipt of goods, not the entry in the register, citing previous decisions to support their claim.

2. The Tribunal considered the argument that the right to Credit accrues upon receipt of inputs, not upon entry in the register. Referring to previous cases, it was established that once the Credit is earned validly, it cannot be taken away by subsequent amendments. The Tribunal emphasized that the admissibility of Credit is based on the receipt of inputs when the scheme was applicable, regardless of when the Credit entry was made. Therefore, in this case, as the inputs were received before the amendment, the Credit was deemed admissible despite being entered in the register post-amendment.

3. The Tribunal also referred to a previous decision regarding the time limit for taking MODVAT Credit after receipt of goods. It was noted that there is no specified time limit for taking Credit, and delays in entry do not pose verification challenges for authorities if proper records are maintained. In this case, the appellants had complied with part of the formalities by maintaining records, and the completion of the remaining formalities did not disqualify them from claiming the Credit. The legal position on the irreversibility of Credit earned when admissible further supported the appellants' case, leading to the allowance of the appeal and granting of consequential reliefs to the appellants.