2001 (10) TMI 804 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit under Rule 57U
2. Imposition of penalty under Rule 173Q
3. Appeal against rejection of Modvat credit
4. Appealability of Asstt. Commissioner's decision

Analysis:

1. The appellants took Modvat credit under Rule 57Q on capital goods based on the original invoice instead of the required duplicate for transporter copy. The Asstt. Commissioner disallowed the credit under Rule 57U and imposed a penalty of Rs. 10,000 under Rule 173Q. The Commissioner (Appeals) upheld the decision, leading to the appeal before the Tribunal.

2. The appellants applied for permission to avail the credit, which was later rejected by the Asstt. Commissioner. The rejection was communicated, and the appellants requested to ratify the credit already taken. However, no action was taken on the request, and a show cause notice was issued, resulting in the current proceedings.

3. The lower appellate authority rejected the appeal on the grounds that the rejection of the application for permission was not appealed against. The main contention was whether the Asstt. Commissioner's decision was appealable. The Tribunal found that the decision was appealable under Section 35 of the Central Excise Act, and since no appeal was filed, the decision became final and binding.

4. The Tribunal analyzed Rule 57T of the Central Excise Rules, emphasizing the requirement for manufacturers to satisfy the Asstt. Commissioner that the duplicate invoice was lost in transit to take Modvat credit based on the original invoice. The decision by the Asstt. Commissioner under sub-rule (8) of Rule 57T was deemed appealable, and the failure to appeal rendered the decision final and binding. As the permission to avail Modvat credit on the original invoice was declined, the credit taken was unauthorized and rightly disallowed by the authorities, leading to the dismissal of the appeal.

Overall, the Tribunal dismissed the appeal, emphasizing the importance of following procedural requirements and appealing decisions to avail of benefits like Modvat credit within the framework of the Central Excise Rules.