2006 (3) TMI 452 - AT - Central Excise

Appellate Tribunal rules in favor of appellants on payment method criteria under Notification No. 58/97-C.E.

The Appellate Tribunal ruled in favor of the appellants, finding that their payment method through a bank demand draft for inputs met the criteria under ... Cenvat/Modvat - Deeming provision in Notification No. 58/97-C.E., Issues:Denial of exemption under Notification No. 58/97-C.E. due to payment method not meeting criteria.Analysis:The case involved the denial of exemption under Notification No. 58/97-C.E. by the lower appellate authority because the payment for inputs was not made through a bank draft from the appellant's own account. The appellant argued that the lower appellate authority's decision was beyond the grounds of appeal put up by the department. The appellant's advocate contended that the notification allows for three alternate modes of payment: cheque drawn on the assessee's own bank account, bank draft, or banker's cheque. The advocate provided evidence that payments for the consignments involved were made against L/C through a bank demand draft, as certified by the bank.Upon considering the submissions and case records, the Appellate Tribunal found that Notification No. 58/97-C.E. clearly allows three modes of payment without specifying that bank drafts must be drawn using money from the assessee's own account. The Tribunal noted that the certificate from the bank confirmed that the conditions under the notification had been met. Consequently, the Tribunal held that the appellants were entitled to the exemption under the said notification. The impugned order was set aside, and the appeals were allowed with consequential benefits to the appellants. Additionally, the stay applications were disposed of by the Tribunal.