2002 (8) TMI 543 - AT - Central Excise

Summary

Issues:
Appeal against disallowance of Modvat credit for capital goods received prior to declaration.

Analysis:
The appellant contested the disallowance of Modvat credit by the Commissioner (Appeals) for capital goods received before filing the declaration. The appellant argued that the goods were received during factory construction and registration application, with the declaration filed even before registration. Citing precedents like Seven Hills Papers and Superior Air Products cases, the appellant claimed entitlement to Modvat credit. Revenue contended that Rule 57T of Central Excise Rules mandates availing benefits only for goods received within 3 months prior to declaration. The Tribunal noted the appellant's factory under construction, registration application on 31-7-95, and declaration filing on 26-6-95. Referring to the Seven Hills Papers case, the Tribunal emphasized the importance of capital goods entering production for credit allowance, clarifying the ambiguity around declaration submission during factory establishment.

The Tribunal's decision in the Superior Air Products case highlighted counting the 3-month period from factory registration for Rule 57T compliance. Consistent with previous rulings in cases like Supreme Wood Products and Paharpur Plastics Ltd., the Tribunal reiterated the significance of capital goods entering production for Modvat credit eligibility. In this instance, the appellant filed the declaration before factory registration, aligning with Tribunal precedents. Considering the 6-month period from registration, the Tribunal overturned the disallowance, granting the appellant Modvat credit for the capital goods in question. Consequently, the impugned order was set aside, and the appeal was allowed.