2002 (12) TMI 477 - AT - Central Excise

Summary

Issues:
1. Denial of credit of duty paid on "Inner Assembly for End Shield" due to lack of specific declaration under Rule 57G of the Central Excise Rules.
2. Sustainability of the demand on the ground of limitation.
3. Similar favorable order by the Commissioner (Appeals) in a previous case.

Analysis:

1. The primary issue in this case is the denial of credit of duty paid by the appellant on the "Inner Assembly for End Shield" because neither the input nor the final product was specifically declared under Rule 57G of the Central Excise Rules. The appellant had filed declarations indicating the inputs intended for the final product and obtained acknowledgment from the Assistant Collector of Central Excise. The appellant contended that a broad description of the inputs sufficed, citing a previous Tribunal decision. The Tribunal agreed, stating that a generic description identifying inputs under a specific heading was adequate. Hence, denial of Modvat credit for lack of detailed input description was unjustified.

2. The second issue addressed was the sustainability of the demand on the ground of limitation. The show cause notice was issued in 1996 for credit availed in 1991, falling under the period before an amendment to Rule 51A in 1995. The limitation period was crucial, running from the date of taking credit. The appellant disputed receiving a letter in 1989 calling for more details, which the Revenue used to argue against the limitation defense. However, the Tribunal found no evidence that the letter was received and noted the appellant's response in 1990 was related to a visit by the Assistant Collector, not the alleged letter. As there was no intent to evade duty, the demand was deemed unsustainable based on limitation grounds.

3. Additionally, the Tribunal considered a similar order by the Commissioner (Appeals) in a previous appeal by the appellant, where credit for the same product was disallowed for the same reason. This order favored the appellant, further supporting the Tribunal's decision to set aside the impugned order and allow the appeal. The consistency in decisions reinforced the appellant's position regarding the credit of duty on the "Inner Assembly for End Shield."

In conclusion, the Tribunal ruled in favor of the appellant, rejecting the denial of Modvat credit and deeming the demand unsustainable due to the lack of detailed input description and the absence of evidence supporting the limitation argument. The reference to a previous favorable order by the Commissioner (Appeals) further strengthened the appellant's case, resulting in the appeal being allowed.