2000 (9) TMI 109 - AT - Central Excise

Tribunal allows Modvat credit under customs duty exemption rule

STEELCO GUJARAT Versus COMMISSIONER OF C. EX., VADODARA

STEELCO GUJARAT Versus COMMISSIONER OF C. EX., VADODARA - 2000 (122) E.L.T. 381 (Tribunal) Issues involved: 1. Interpretation of notification 203/92 regarding customs duty exemption and Modvat credit. 2. Eligibility of Modvat credit on duty paid on consignments of hot rolled steel coils.Issue 1 - Notification 203/92 and Modvat Credit: The appeal considered whether availing the benefit of notification 203/92 forfeits the right to Modvat credit on duty paid on inputs used in the exported product. The notification exempts from customs duty subject to conditions, including not availing Modvat credit. The Tribunal held that the denial of Modvat credit is not justified as there is no provision in Modvat rules disallowing credit when customs duty exemption is availed. The appellant's defense that the import was under a different notification was not accepted, emphasizing the fundamental nature of the issue.Issue 2 - Modvat Credit on Hot Rolled Steel Coils: The second question revolved around the appellant's entitlement to Modvat credit on duty paid on hot rolled steel coils. The duty was paid by another manufacturer after the goods were cleared to the appellant for cold rolling. Despite the initial lack of duty paying documents, the Tribunal ruled in favor of the appellant. Rule 57E allows for credit to be taken or recredited based on subsequent variations in duty paid. The Tribunal referenced a previous case to support the appellant's position, highlighting compliance with conditions under Rule 57G.The Appellate Tribunal CEGAT, Mumbai allowed the appeal, setting aside the impugned order.