1998 (8) TMI 207 - AT - Central Excise

Tax Tribunal: Notification 64/94-C.E. (N.T.) applies to capital goods traders. Rule 57T(3) & Circular No. 76/76/94-CX relevant.

The Tribunal held that Notification 64/94-C.E. (N.T.) covers traders dealing in capital goods. It was determined that Rule 57T(3) requires specific ... Modvat on capital goods Issues:1. Interpretation of Notification 64/94-C.E. (N.T.) regarding traders dealing in capital goods.2. Eligibility for credit on capital goods under Rule 57T(3) and prescribed documents under Rule 57G.3. Application of CBEC Circular No. 76/76/94-CX and Notification 32/94-C.E. (N.T.) to dealers issuing invoices for capital goods.Issue 1: Interpretation of Notification 64/94-C.E. (N.T.)The appeal involved a dispute regarding the coverage of Notification 64/94-C.E. (N.T.) and whether it extended to traders dealing in capital goods. The assessees initially reversed the credit taken on capital goods due to a show cause notice, which was later dropped. Subsequently, a refund claim was filed, which was rejected by the Commissioner (Appeals) on the same ground. The main contention was whether the notification covered traders dealing in capital goods.Issue 2: Eligibility for credit on capital goodsThe advocate for the appellants argued that Rule 57T(3) required the production of eligible documents under Rule 57G for taking credit on capital goods. He referenced Notification No. 32/94 and Rule 57GG(i) which covered dealers' invoices under Rule 57G and Rule 57T. The advocate also highlighted a CBEC Circular clarifying the amendment made by Notification 64/94, emphasizing that the clarification applied to dealers issuing invoices for capital goods.Issue 3: Application of CBEC Circular and Notification 32/94-C.E. (N.T.)The Tribunal examined the application of the CBEC Circular and Notification 32/94 to the case, citing a previous judgment where the Tribunal upheld the application of a similar clarification in a different context. The Tribunal found that the lower authorities were wrong in not considering the contents of the Circular in the case at hand. It was concluded that the Circular applied to capital goods as well, and the lower orders were set aside. The proceedings were remanded back to the Assistant Commissioner for further examination of the refund claim in light of Section 11B provisions.