2001 (7) TMI 788 - AT - Central Excise

Summary

Issues:
1. Appeal against the order passed by Commissioner (Appeals) regarding the rejection of claim under Rule 57H.
2. Interpretation of the term "immediately before" in Rule 57H.
3. Rejection of Modvat credit on the ground of delayed submission of the application under Rule 57H.
4. Dispute regarding the production of final products in stock as of March 1998.

Analysis:
1. The appellant filed declarations under Rule 57G and Rule 57H concerning inputs and finished products. The Asstt. Commissioner rejected the claim under Rule 57H, citing delayed submission and lack of raw material issue for final product manufacture in March 1998. The Commissioner (Appeals) referred to precedents and allowed Modvat credit, emphasizing the necessity of raw materials for finished product manufacturing.

2. The Revenue contended that "immediately before" in Rule 57H refers to the declaration filing before Rule 57G. However, the Commissioner (Appeals) and the Tribunal, citing the Soft Beverages case, clarified that "immediately before" pertains to the availability of inputs for verification, not the declaration timing. The Tribunal upheld this interpretation.

3. The Revenue raised concerns about final product production in March 1998, implying an undue Modvat credit claim. The Commissioner (Appeals) noted duty payment on final products, dismissing the Revenue's suspicion of ulterior motives. The Tribunal concurred, stating that if final products were genuinely produced, duty payment was obligatory, negating any improper intent.

4. Considering the above, the Tribunal found no merit in the Revenue's appeal and dismissed it. The judgment upheld the Commissioner (Appeals)' decision, emphasizing the importance of raw materials for finished product manufacturing and rejecting the Revenue's contentions regarding the timing of declarations and final product production.