2002 (6) TMI 551 - AT - Central Excise

Summary

Issues:
1. Eligibility of certain goods for Modvat Credit
2. Availability of Modvat credit based on stamped invoices

Eligibility of certain goods for Modvat Credit:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the eligibility of certain goods for Modvat Credit. The Revenue contended that the Commissioner (Appeals) erred in allowing credit to the respondent on the basis of invoices stamped with "Duplicate for transporter" instead of being printed. The Revenue argued that such invoices are not valid for availing credit, as they could be easily manipulated. Additionally, the Revenue challenged the allowance of capital goods credit for specific items like ACB-800A, Vacuum Gauge, and ELO Guard, claiming these items did not qualify as capital goods under the Central Excise Rules. On the contrary, the respondent argued, citing legal precedents, that all the items in question were indeed capital goods as they were essential in the manufacturing process. The respondent also justified the stamped invoices as valid under Rule 57GG of the Central Excise Rules.

Availability of Modvat credit based on stamped invoices:
The Tribunal analyzed the arguments presented by both sides. Regarding the stamped invoices issue, the Commissioner (Appeals) referred to Circular No. 202/36/96-CX, dated 26-4-96, which allowed credit for duty paid on inputs based on stamped invoices during a specific period. The Tribunal agreed with the respondent's contention that Rule 57GG only required invoices to be marked, not necessarily printed. Furthermore, the Tribunal acknowledged the Supreme Court's decision in a previous case, establishing a broad definition of capital goods under Rule 57Q. As a result, the Tribunal concluded that all the goods in question qualified as capital goods, as they were integral to the manufacturing process. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision to allow the Modvat credit for the respondent.

In summary, the Tribunal ruled in favor of the respondent, affirming the eligibility of the goods for Modvat Credit and the validity of stamped invoices for availing credit. The decision was based on the broad interpretation of capital goods under the Central Excise Rules and legal precedents supporting the inclusion of essential items in the manufacturing process as capital goods.