2004 (10) TMI 497 - AT - Central Excise

Summary

Issues:
- Eligibility for deemed credit under Notification No. 58/97 for re-rollers of "Iron & Steel" in respect of inputs purchased from manufacturers who discharged duty liability under Section 3A of the Central Excise Act.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi revolves around the issue of whether the appellants, who are re-rollers of "Iron & Steel," were entitled to deemed credit under Notification No. 58/97 for inputs purchased from manufacturers who discharged duty liability under Section 3A of the Central Excise Act. The Tribunal noted that the appellants were denied credit on the basis that the supplier had not paid the full duty liability as determined by the Commissioner. However, it was highlighted that duty had been paid under Section 3A, and the dispute regarding the quantum of duty should not affect the claim for Modvat credit. Reference was made to the case law of Vikas Pipe v. Commissioner of Central Excise, Chandigarh-II [2003 (158) E.L.T. 680 (P & H)], emphasizing that once there is a certificate of payment of duty under Section 3A, the correctness of the amount paid should not be questioned by the buyer of the inputs.

Furthermore, the Tribunal acknowledged that the appellants' claim aligned with the decision of the Punjab & Haryana High Court and previous rulings of the Tribunal. It was emphasized that the deemed Modvat credit provided under Notification No. 58/97 was a fixed rate of 12% of the input value, independent of the actual duty amount paid. Therefore, the denial of credit in the present cases was deemed unsustainable. Consequently, the impugned order was set aside, and the appeals were allowed, granting consequential relief to the appellant.