TMI Blog2010 (4) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the appellants are engaged in the manufacture of Sponge Iron falling under SH 7203.00 of schedule of CETA 1985. They were availing MODVAT credit facility as per Rule 57A and 57Q for the production of final products. On the visit of officers of Central Excise, certain discrepancies were noticed on availment of MODVAT credit on capital goods. The said discrepancies can be grouped in three broad categories as under: i) Credit taken on original invoices without prior permission from the proper officer - Amount involved ₹ 20,53,765/- Invoice No.1134/15.12.1997, 1144/17.12.97 No.AI-02190 dated 31.12.97. ii) MODVAT credit on power transformer received from BHEL Jhansi Invoice No.1162/31.12.96 - ₹ 23,00,000/- and In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment of duty of ₹ 18,20,000/- vide invoice No.T-1170 dated 31/03/98 and they have accordingly availed the CENVAT credit. They also contended that there was no infringement of Rule 57R (3) and they have followed the procedure prescribed under Rule 57R (3). (III) In case of credit amounting to ₹ 4,26,502/- the appellant did not press for the MODVAT credit in respect of Sl.No. (i) and (iii) during the adjudication itself and remaining items they submitted that they are capital goods. 6. The respondent reiterated the findings in the impugned order-in-original. They further contended that the provision relating to availment of credit on the basis of original copy of invoice in certain situation under Rule 57T (8) were int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner during the adjudication brushed aside the issue stating that the appellant can contest before the Divisional Assistant/Deputy Commissioner and obtain necessary order of availing credit. The ld. Counsel pointed out that as per Section 12E, a Central Excise officer can discharge the function of his subordinate officer. The jurisdictional Assistant Commissioner did not dispose of the application of the appellant for over five years and if the appellant have to go back to the Assistant Commissioner again as per the ld. Commissioners above observations, the matter would linger on for indefinite period. Further, the Assistant Commissioner and the ld. Commissioner had not given any decision on the application whether the averment made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) does not contain any stipulation to the effect that, credit on capital goods acquired on lease can be availed only after reimbursement of the excise duty component to the financing company. They also relied upon the Tribunals decision in their own case (Order No.A/1393/WZB/06-C-III (EB) dated 24/07/2006 wherein similar view was held. Therefore, disallowance of credit is not sustainable. The impugned order is set aside and the appeal is allowed to this extent. 9. As regards the MODVAT credit availed on transformer amounting to ₹ 23.00 lakhs which was not received in the manufactory of the appellant. The contention of the appellant is that duty has been paid by their suppliers, therefore they are entitled for the MODVAT credit on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts/accessories of which machine and whether the said machine was covered under the definition of capital goods, therefore, the credit is not allowable. The impugned order is upheld and the appeal is dismissed to this extent. 11. Since the major portion of the MODVAT credit is allowed by us and penalty related issue in case of MODVAT credit amounting to ₹ 23,00,000/- is linked with limitation issue which has been remanded the equal amount of penalty of ₹ 66,00,257/- imposed under Rule 57U (6) of Central Excise Rules 1944 and penalty of ₹ 1,00,000/- is set aside and the appeal is allowed to this extent. 12. In these circumstances, it is hereby ordered that: (i) In case of MODVAT credit amounting to ₹ 20,53,765 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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