2003 (3) TMI 227 - AT - Central Excise

Summary

Issues involved: Interpretation of Modvat credit eligibility based on endorsed invoices between sister units.

Summary:
The Appellate Tribunal CEGAT, Chennai, addressed the appeal filed by the Revenue challenging the extension of Modvat Credit benefit to the appellants based on endorsed invoices from a sister unit. The Revenue objected to the use of endorsed invoices for Modvat credit. The Tribunal noted that while endorsed invoices are not typically accepted for Modvat credit in independent transactions, in this case, where consignments were transferred between sister units of the same parent company, the situation was different. The consignments of inputs were duly received and utilized in the manufacture of final products by the Respondents, with no sale involved between the sister units. Citing a previous Tribunal decision, the Tribunal found no issue with the Commissioner (Appeals) decision to allow the Modvat credit in this scenario, and thus rejected the Revenue's appeal.

This judgment clarifies that in cases of transfer of consignments between sister units of the same parent company, where duty-paid inputs are utilized in manufacturing final products, the use of endorsed invoices for Modvat credit can be justified, even if it deviates from the norm applied in independent transactions.