Capital goods credit under Rule 57T(13) required consideration of the proviso before denial and demand confirmation.

Credit under Rule 57T(13) of the Central Excise Rules could not be denied merely because invoices lacked a description of the capital goods; the adjudicating authority was required to examine the proviso, including whether duty on the capital goods had been paid and whether the goods had been used or were intended for use in manufacturing final products. Because that proviso had not been considered before confirming demand and denial of credit, the matter was remanded for fresh consideration after observing natural justice. The appellant was to receive the credit benefit if the stipulated conditions were found satisfied.

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Issues: Whether the demand of duty and denial of credit under Rule 57T(13) of the Central Excise Rules were sustainable without considering the proviso requiring satisfaction that duty had been paid on the capital goods and that such goods had actually been used or were intended to be used in the manufacture of final products.

Analysis: The order rejecting the benefit of credit proceeded on the footing that the invoices did not contain the description of the goods and therefore the requirement under Rule 57T(13) was not met. The proviso to the sub-rule, however, required the adjudicating authority to satisfy itself that duty on the capital goods had been paid and that the capital goods had actually been used or were to be used in the manufacture of final products, and to record reasons for not denying credit. That proviso had not been considered while confirming the demand. The matter therefore required reconsideration by the original authority after examining the satisfaction of the conditions in the proviso and after observing natural justice.

Conclusion: The matter was remanded to the original adjudicating authority for fresh consideration of the proviso to Rule 57T(13), and the appellant was to receive the benefit if the stipulated conditions were found satisfied.

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