2002 (12) TMI 524 - AT - Central Excise

Summary

Issues:
Dispute over eligibility of 'chrome paper' for Modvat credit. Denial of Modvat credit on inputs received before 15-10-97. Revenue's appeal against order allowing Modvat credit before cut-off date. Legal validity of Commissioner's condonation of delay. Appellant's absence during proceedings.

Analysis:
1. The appellants, as manufacturers of poly-quoted paper, availed Modvat credit on inputs but faced a dispute regarding the eligibility of 'chrome paper' under Chapter Heading No. 4810.10. The Commissioner (Appeals) allowed Modvat credit on inputs received after a clarificatory declaration filed on 15-5-95, but denied credit on inputs received before 15-10-97, six months prior to the declaration.

2. The appellants appealed to claim credit on inputs received before 15-10-97, while the Revenue challenged the order, arguing that Modvat scheme rules required adherence to Rule 57G procedures. The Revenue contended that the Commissioner's allowance of credit before the cut-off date was incorrect, as the declaration for chrome paper was made after the specified date, and Rule 57G(9) empowered the Asstt. Commr. to condone delays under specific conditions.

3. During the proceedings, the appellants did not appear, and the Revenue reiterated its grounds for appeal. The judge considered the submissions and found that previous rulings and circulars emphasized providing credit unless essential details were missing. The judge noted the duty paid nature of inputs, their use in final products, and the binding nature of Board circulars. The judge concluded that the dispute over chrome paper was trivial, allowing the Modvat credit on inputs received before 15-10-97 up to 15-5-95.

4. Consequently, the judge allowed the appellant's appeal, lifting the embargo on Modvat credits for chrome paper and dismissing the penalty. As Modvat credit was eligible from the first declaration in May 1995, the Revenue's appeal was also dismissed. The judge directed the implementation of the order, disposing of both appeals and the stay petition.