Appeal success for Modvat credit on tissue paper, amended bills upheld, cess amount denied credit.

The Collector (Appeals) allowed the appeal in part, holding that Modvat credit on tissue paper of no commercial value was correct. The issue of Rs. 1441/- cess amount not being eligible for credit was undisputed and the appeal was allowed on this ground. The acceptance of amended bills of entry for credit, despite a classification discrepancy, was upheld as the incorrect classification did not affect credit availability. The Tribunal restored the Assistant Collector's order, disallowing credit on the cess amount while affirming credit on tissue paper and amended bills of entry.

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Issues:
1. Correctness of Modvat credit on tissue paper of no commercial value.
2. Cess amount not eligible for credit.
3. Acceptance of amended bills of entry for credit.

Analysis:
1. The Collector (Appeals) held that the appellant correctly took Modvat credit on tissue paper of no commercial value and set aside the Assistant Collector's order. The departmental representative raised three grounds in the appeal, one being that a sum of Rs. 1441/- representing cess could not be taken as credit. The Advocate for the respondent argued that the Assistant Collector did not confirm the demand based on this ground, making it irrelevant for the appeal. The Assistant Collector's order was ex parte, and the Collector (Appeals) did not address this aspect, leading to a defective order. The Collector (Appeals) set aside the Assistant Collector's order without addressing the issue of the Rs. 1441/- amount, which the department was entitled to appeal. The appeal on this ground was allowed as the fact that cess could not be taken as credit was undisputed by the respondent.

2. The next ground raised was regarding the acceptance of amended bills of entry for credit, where the classification of goods was changed after clearance. The appellant had declared tissue paper, and the only issue raised was the classification discrepancy between the bills of entry and the declaration. The bill of entry was later amended to classify the goods differently. The Tribunal noted that the amendment of classification after clearance was irregular, but it did not affect the appeal's decision. The incorrect classification itself could not prevent the availment of credit on properly declared goods. The Tribunal upheld the Collector (Appeals) order on this issue, allowing the appeal to the extent that credit would not be available on Rs. 1441/- and restoring the Assistant Collector's order accordingly.

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