2001 (1) TMI 322 - AT - Central Excise

CEGAT Kolkata: Modvat credit allowed despite minor discrepancies in goods received recording.

The Appellate Tribunal CEGAT, Kolkata allowed Smt. Archana Wadhwa's appeal regarding the denial of Modvat credit due to errors in recording quantities of ... Modvat credit - rectification of RG-23C Part-I entries - input tax credit denial for clerical/quantitative mismatch - installation as evidence of receipt of capital goods - classification variance not defeating credit where Chapter Heading is the sameModvat credit - rectification of RG-23C Part-I entries - input tax credit denial for clerical/quantitative mismatch - installation as evidence of receipt of capital goods - Denial of Modvat credit for Dissolver Equipped with Turbo Mixer Inner and Outer Jacket on the ground of mismatch between invoice quantity (eight pieces) and RG-23C Part-I entry (two pieces). - HELD THAT: - The appellants explained that the goods comprised two numbers consisting of eight pieces and that the entry of 'two pieces' in the Modvat records was a clerical mistake instead of recording 'two numbers and eight pieces'. The appellants have offered to rectify the RG-23C Part-I entries and there is no dispute from the Revenue that the goods were received and installed in the factory. In these circumstances, a mere clerical or quantitative mismatch in the register, when receipt and installation of the capital goods are uncontroverted and rectification is offered, does not justify denial of Modvat credit. The Tribunal therefore set aside the portion of the impugned order denying credit and allowed rectification followed by grant of credit.Modvat credit allowed for the Dissolver; appellants permitted to rectify RG-23C Part-I and credit granted.Modvat credit - input tax credit denial for clerical/quantitative mismatch - installation as evidence of receipt of capital goods - Denial of Modvat credit for Chain Clip where invoice showed 20 pieces but records showed two pieces. - HELD THAT: - The shortfall in recorded quantity was attributed to a mistake by the clerk maintaining the register. The appellants asserted that all goods were received and installed, a fact not disputed by the Revenue, and offered to rectify the register. The Tribunal treated this as a clerical error analogous to the Dissolver case and concluded that such a mistake, when rectifiable and where receipt/installation is established and undisputed, cannot justify denial of Modvat credit.Modvat credit allowed for the Chain Clip subject to rectification of RG-23C Part-I entries.Modvat credit - classification variance not defeating credit where Chapter Heading is the same - Denial of small amounts of Modvat credit for Coils because manufacturers' invoices classified items under differing tariff sub-headings while appellants declared the Coils under a particular classification within the same Chapter Heading. - HELD THAT: - The Tribunal observed that the minor variations in tariff classification in the invoices (different sub-headings within the same Chapter Heading) did not warrant denial of Modvat credit where there was no dispute about receipt of the goods in the appellants' factory and the Chapter Heading was the same. Such minor classification discrepancies were held insufficient to justify disallowance, and the amounts denied on this ground were allowed.Modvat credit allowed in respect of the Coils despite minor invoicing classification differences within the same Chapter Heading.Final Conclusion: The appeal is allowed; the portions of the impugned order denying Modvat credit for the Dissolver, the Chain Clip and the Coils are set aside, the appellants' offer to rectify RG-23C Part-I is accepted, consequential reliefs are granted, and the stay petition is disposed of. The Appellate Tribunal CEGAT, Kolkata allowed the appeal by Smt. Archana Wadhwa regarding denial of Modvat credit for errors in recording quantities of goods received. The Tribunal found no reason to deny the credit as the goods were received and installed in the factory, despite minor discrepancies in classification of some items. The appeal was allowed with consequential reliefs granted.