2003 (7) TMI 533 - AT - Central Excise

Summary

Issues:
1. Availability of MODVAT credit without filing declaration under Rule 57G of the Central Excise Rules.

Analysis:

The appeal before the Appellate Tribunal CESTAT, Mumbai involved the issue of whether the benefit of MODVAT credit of duty paid on inputs was available to M/s. Gurjari Building Materials (P) Ltd. without filing a declaration under Rule 57G of the Central Excise Rules. The appellant, a Small Scale Industry (SSI) unit, had initially availed exemption up to a specified limit and subsequently started availing MODVAT credit. The Commissioner (Appeals) disallowed MODVAT credit as the appellant did not file a declaration during the financial year 1990-91. The appellant argued that filing a declaration in 1989 was sufficient and relied on a previous decision stating that the submission of a declaration is a procedural formality. The Departmental Representative contended that a new declaration was required when the appellant started paying duty after crossing the exemption limit. The Tribunal considered the submissions of both parties and noted that the appellant had filed a MODVAT declaration in 1989, informing the department of their intention to avail the scheme. The Tribunal observed that the appellant had followed the prescribed procedure by availing exemption up to a certain limit and then paying duty at a concessional rate after crossing the exemption limit, while also taking MODVAT credit. Additionally, the Tribunal referred to an amendment in Rule 57G and a circular issued by the Board, which allowed for credit of duty paid on inputs despite minor procedural lapses in filing the declaration. The Tribunal, relying on a previous decision by the Larger Bench, held that the MODVAT credit could not be denied to the appellant as the declaration was filed in 1989, inputs were received, and used in the manufacturing process. Consequently, the impugned order was set aside, and the appeal was allowed.