2001 (8) TMI 189 - AT - Central Excise

Appellate Tribunal decision on Modvat credit and time limit exemption for Bill of Entry transactions

BULLOWS PAINT EQUIPMENT PVT. LTD. Versus COMMR. OF C. EX., MUMBAI-VI

BULLOWS PAINT EQUIPMENT PVT. LTD. Versus COMMR. OF C. EX., MUMBAI-VI - 2001 (138) E.L.T. 1098 (Tri. - Mumbai) Issues involved: Modvat credit of duty paid on inputs received against invoices and Bill of Entry (B/E), interpretation of Rule 57G regarding time limit for taking credit.Summary:The appeal before the Appellate Tribunal CEGAT, Mumbai involved the issue of Modvat credit taken by the appellants on duty paid against invoices and a Bill of Entry (B/E). The appellants had taken credit later than six months from the dates of issue of the invoices and the B/E. The Deputy Commissioner issued a show cause notice for reversal of the credit, which was contested by the assessee. The Commissioner (A) upheld the demand and penalty, leading to the present appeal before the Tribunal.Upon reviewing a Tribunal judgment related to time limits for taking credit, it was noted that Rule 57G did not originally specify a time limit. However, the rule was later amended to include a six-month period for taking credit from the date of issue of the relevant documents.Rule 57G(3) outlines the documents entitling manufacturers to take Modvat credit, including invoices and B/Es. The rule does not specify that the date of issue of the B/E is relevant for taking credit. The Tribunal found merit in the argument that the date of issue of the B/E should not be considered the relevant date for taking credit.The Tribunal concluded that the bar on taking credit after six months would not apply when goods are received under the cover of a Bill of Entry. In the case at hand, the denial of Modvat credit on the invoice was upheld partially, with a portion of the denial sustained and the rest set aside. Consequently, the penalty imposed on this ground was also set aside, and the appeal was allowed accordingly.