Tribunal grants Modvat credit after finding discrepancies in duty payment

The Tribunal allowed the appeal against the disallowance of Modvat credit by the Commissioner (Appeals) due to inputs allegedly not received in the factory. The Tribunal found discrepancies between the credit availed and duty paid, indicating that the Appellants did receive and use the raw material. The Department's case was based on presumptions without verifying with the supplier, while the Appellants argued they converted the raw material into finished goods and paid duty. The Tribunal set aside the order and permitted the Modvat credit.

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Issues involved: Disallowance of Modvat credit on the ground of inputs not received in the factory.

Summary:
The appeal was filed against the disallowance of Modvat credit by the Commissioner (Appeals) on the basis that the inputs were not received in the factory. The Appellants had purchased copper scrap as raw material for manufacturing copper ingots, taken Modvat credit based on supplier's invoice, and cleared copper ingots after payment of duty. The Department's case relied on presumptions and statements, without verifying with the supplier. The Appellants argued that they received the raw material, converted it into copper ingots, and paid duty, questioning the logic of not receiving inputs but manufacturing and paying duty. The Tribunal noted the discrepancy between the credit availed and duty paid, indicating that the Appellants did receive and use the scrap. Consequently, the Tribunal set aside the order and allowed the appeal.

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