2002 (4) TMI 678 - AT - Central Excise

Summary

Issues:
1. Admissibility of deemed credit on inputs under Notification No. 29/96-C.E. (N.T.).
2. Interpretation of Rule 57G(5) of the Central Excise Rules, 1944 regarding the time limit for availing credit.
3. Applicability of specific provisions over general provisions in the case of deemed credit.

Analysis:

Issue 1: Admissibility of Deemed Credit
The appellants, engaged in manufacturing fabrics falling under different chapters, were exporting man-made fabrics under bond and availing deemed Modvat credit on inputs under Notification No. 29/96-C.E. (N.T.). The Central Excise Officers noted a delay in availing the deemed credit, leading to a show cause notice alleging inadmissibility due to the delay beyond six months. The Deputy Commissioner disallowed the credit, imposing a penalty. The party's appeal was rejected by the Commissioner (Appeals).

Issue 2: Interpretation of Rule 57G(5)
The appellants argued that the time limit of six months under Rule 57G(5) is not applicable to deemed credit under the notification. They contended that since the deemed credit is allowed without production of duty payment documents, the time limit should not be enforced. The Tribunal concurred, emphasizing that the specific provision in the notification for availing deemed credit at the time of final product clearance overrides the general provisions of Rule 57G.

Issue 3: Specific vs. General Provisions
The Tribunal highlighted that the notification explicitly states the deemed credit is to be availed at the time of final product clearance, precluding post-clearance availment. The Tribunal rejected the relevance of the judgments cited by the appellants, emphasizing the specificity of the notification's provisions over the general provisions of Rule 57G. Consequently, the appeal was dismissed, upholding the disallowance of deemed credit and penalty imposition.

In conclusion, the Tribunal affirmed the disallowance of deemed credit due to the delayed availment beyond the time of final product clearance, emphasizing the specific provisions of the notification over general rules and rejecting the applicability of the six-month limit under Rule 57G(5) in cases of deemed credit.