2003 (9) TMI 642 - AT - Central Excise

Summary

Issues: Denial of Modvat credit for certain capital goods and inputs due to administrative delay in acknowledging the declaration.

Analysis:
1. The Assistant Commissioner of Central Excise, Palakkad Division denied Modvat credit for capital goods and inputs in the Order-in-Original dated 27-2-98. The Commissioner of Customs and Central Excise (Appeals), Cochin confirmed this denial in the Order-in-Appeal dated 30-1-2001. The appeal challenges the confirmation of the Order-in-Original dated 27-2-98.

2. The denial of credit for capital goods was not pressed by the appellant, focusing the appeal on the denial of Modvat credit for certain inputs. The appellant argued that the denial was based on an administrative delay in acknowledging their declaration dated 5-8-97. The appellant contended that the delay in acknowledgment by the authorities should not be a reason for denial. The records and submissions confirmed that the delay was in acknowledging the declaration, not in filing it, which should not justify the denial of Modvat credit for the inputs.

3. The Order-in-Original dated 27-2-98 mentioned condoning the filing of the declaration under Rule 57G from 19-2-97, even though the appellant filed it on 5-8-97. The appellant's letter dated 22-12-1997 further clarified the delay in acknowledgment, not filing, of the declaration. The Tribunal concluded that the administrative delay in acknowledging the declaration should not be a valid reason to deny the Modvat credit for the inputs. Therefore, the denial of Modvat credit for the inputs was set aside, and the appeal was allowed on this ground.