2001 (8) TMI 355 - AT - Central Excise

Summary

Issues:
1. Eligibility of Modvat credits on inputs - Appeal No. E/1315/2000
2. Eligibility of Modvat credits on inputs - Appeal No. E/1767/2000

Eligibility of Modvat credits on inputs - Appeal No. E/1315/2000:
In this appeal, the dispute centered around the eligibility of Modvat credits on inputs, specifically regarding the input "Lissapol 100X." The appellant argued that the credit was taken after filing the declaration under Rule 57G, as the declaration was filed prior to taking the credit and the goods were received in the factory before the credit was claimed. The appellant contended that the "Lissapol 100X" was used in the washing of dutiable yarn, not exempted varieties as alleged. The appellant supported their claim with an affidavit from the DGM stating that the exempted variety of yarn manufactured was plain hank yarn, which is sold without washing, and the yarn used for fabric manufacture was dutiable. The appellant emphasized the lack of evidence supporting the allegation that the input was used in washing exempted varieties of yarn. The Tribunal found merit in the appellant's arguments, noting that the appellant's submissions were supported by copies of declarations and affirmed that the denial of Modvat credit was unjustified. Consequently, the appeal was allowed, and the impugned orders were set aside.

Eligibility of Modvat credits on inputs - Appeal No. E/1767/2000:
In Appeal No. E/1767/2000, the issue revolved around the Modvat credit taken in relation to the input "Dispersonal VLH." The objection raised was that the declaration for this input was filed after the credit was claimed. However, the appellant clarified that the item was included in their declaration filed prior to taking the credit and highlighted that this position was clarified during adjudication proceedings. The Tribunal considered the appellant's explanation and found that the appellant's submissions were consistent with the copies of declarations provided. It was noted that there was no evidence supporting the allegation that the input was used in the manufacture of non-dutiable yarn. Based on the lack of evidence and the appellant's consistent assertions, the Tribunal concluded that the denial of Modvat credit in this case was unwarranted. As a result, the appeal was allowed, and the impugned orders were set aside, with any consequential relief to be granted to the appellant.

In both appeals, the Tribunal emphasized the importance of examining the facts carefully and ensuring that the denial of Modvat credit is based on substantial evidence. The decisions underscored the significance of compliance with procedural requirements and the need for clear documentation to support claims for Modvat credits on inputs.