Tribunal upholds order on Modvat credit appeal, dismissing Department's case and resolving Cross ObjectionCentral Excise – The appellant received capital goods when final product (Packaged Tea) was exempt from duty – Credit was taken after pulling out of exemption is allowable... ... ... Issues involved:
1. Availment of Modvat credit on capital goods without filing declaration for exempted products.

Analysis:

The case revolves around the appellant's availment of Modvat credit on capital goods without filing a declaration for exempted products. The appellant received a Tea Packing Machine in their factory while their final product, "Packaged Tea," was exempted from duty. The key point of contention is whether the capital goods were installed in the factory during the relevant period. The show cause notice alleged that the appellant availed credit when their products were exempted from duty but took the credit after the products were brought into the tax net. The Commissioner (Appeals) highlighted that the appellant received the capital goods before the imposition of the levy on their final product but took the credit after the levy was imposed. This implies that the appellant might have installed the machine after their products became taxable.

The Tribunal, after hearing the arguments and examining the records, found that the issue at hand was narrow and proceeded to dispose of the appeal without postponing the hearing. The order-in-appeal was deemed sound, with no identified flaws warranting interference. Consequently, the Department's appeal was dismissed, and the Cross Objection filed by the Respondent was also addressed and resolved. The judgment concludes with the pronouncement of the decision in open court, bringing the matter to a close. Central Excise – The appellant received capital goods when final product (Packaged Tea) was exempt from duty – Credit was taken after pulling out of exemption is allowable CCE, SILIGURI Versus CHAUPARA POLY PACK UNIT
Central Excise
2006 (4) TMI 4 - Appellate Tribunal, Kolkata - 2006 (74) RLT 975 (CESTAT - Kol.)
APPELLATE Tribunal, Kolkata - AT
Dated:- 20-4-2006
Appeal No. ESM-263/2004 - Final Order No. A/234/Kol. /2006
Central Excise
The issue involved in this case is regarding the availment of Modvat credit by the appellant on capital goods without filing declaration and that the said capital goods were used for exempted products. 2. There is a request for postponement of the hearing as the appellants busy in financial year ending activities. 3. Heard the Ld. DR and perused the records, I find from the records that the issue involved in this case is in a narrow compass and hence take up the appeal itself for disposal rejecting the request for postponement of the hearing. 4. The issue involved in this case that the appellant received Tea Packing Machine in their factory on 16.5.98, at that time, their final product i.e. "Packaged Tea" were exempted from payment of duty. It is not clear from the order-in-original or from order-in-appeal, that whether such machine/ capital goods were installed in the factory during the relevant period. The allegations in the show cause notice are that the respondents availed the credit on 4.6.98, while they received the capital goods when their final products were exemptad from payment of duty. The Respondent's product "Packaged Tea" was brought into the tax net from 2.6.98. The Respondent availed the Modvat credit on such capital goods on 4.6.98 i.e. after their products were brought into the tax net. It has to be presumed, that the respondent might have installed the said machine after their products were brought into the tax net. The Commissioner (Appeals) has clearly brought out the law involved in this case coming into the findings that "the respondent received the capital good prior to imposition of levy on their final product, package tea, but credit was taken after levy was imposed on such final product." 5. To my mind, the order-in-appeal does not suffer from any infirmity and hence does not require any interference. The Department's appeal is dismissed and the Cross Objection filed by the Respondent is also disposed of. Dictated and pronounced in the open Court.
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