2005 (8) TMI 549 - AT - Central Excise

Tribunal overturns credit denial order, stresses invoice verification. Notification No. 7/99-C.E. and Circular No. 441/7/99 significance.

The Tribunal set aside the order denying Modvat credit, ruling in favor of the appellant. The decision emphasized the importance of verifying duty payment ... Cenvat/Modvat - Inputs - Declaration Issues:1. Denial of Modvat credit due to discrepancies in declaration of inputs.2. Interpretation of Rule 57G of Central Excise Rules regarding Modvat credit.3. Applicability of Notification No. 7/99-C.E. and Circular No. 441/7/99 in denying credit.Analysis:The appellant filed an appeal against the order-in-appeal denying Modvat credit, arguing that they had declared the inputs correctly under Rule 57G of Central Excise Rules. They contended that although the description of inputs in the invoices differed from the declaration, the goods were used in manufacturing final products under the same tariff heading as declared. They also cited the amendment by Notification No. 7/99-C.E. and Circular No. 441/7/99, which clarified that credit should not be denied for minor procedural lapses.The Revenue, however, argued that discrepancies between the description in the declaration and invoices justified the denial of credit. They pointed out instances where the description of inputs in the declaration did not match the actual goods received, such as PU Foam Blocks declared but receiving Sleep Well Mats. Despite this, the Board's circular emphasized the need for the Assistant Commissioner to verify the duty paid nature of goods and other details before denying credit for procedural reasons.In light of the amendment to Rule 57G and the circular, the Tribunal found the denial of credit unsustainable and set aside the impugned order, allowing the appeal. The judgment highlighted the importance of verifying duty payment and essential details on invoices before denying Modvat credit based on minor discrepancies between declarations and actual goods received.This detailed analysis of the judgment showcases the interpretation of Rule 57G, the significance of Notification No. 7/99-C.E., and Circular No. 441/7/99 in determining the eligibility of Modvat credit, emphasizing the need for thorough verification before denying credit based on procedural grounds.