2004 (2) TMI 554 - AT - Central Excise

Summary

Issues: Denial of Modvat credit to the appellants of Rs. 9,69,765

Analysis:
1. The issue in this appeal pertains to the denial of Modvat credit amounting to Rs. 9,69,765 to the appellants. The learned Counsel argued that the capital goods for which the credit was disallowed were declared by the appellants under Rule 57-T, with any delay in filing the declaration being condoned by the Assistant Commissioner. The Counsel relied on the precedent set in the case of Kamakhya Steels (P) Ltd. v. CCE, Meerut. On the contrary, the JDR supported the impugned order disallowing the credit.

2. Upon reviewing the record, it was found that the appellants initially submitted a general declaration with only the Tariff headings of the goods on 21-4-1994. Subsequently, they provided a specific declaration regarding the capital goods on 30-5-1995, while the credit was availed between 2-12-1994 and 29-12-1994, before the specific declaration was made. The Addl. Commissioner allowed the credit and dismissed the show cause notice issued for denial of credits, citing the condonation of delay by the Assistant Commissioner on 17-7-1995. However, it was noted that the Assistant Commissioner lacked the authority to condone delays exceeding three months. The Commissioner (Appeals) rightly disregarded the condonation of delay beyond the Assistant Commissioner's jurisdiction, especially since the show cause notice had already been served before the condonation.

3. The judgment highlighted that the case did not align with the precedent of Kamakhya Steel as it pertained to a period predating the amendment of Rule 57-T. The amendment was deemed prospective, not retrospective, leading to the rightful disallowance of Modvat credit to the appellants. Consequently, the Commissioner (Appeals) decision was upheld, and the appeal was dismissed, affirming the denial of Modvat credit to the appellants amounting to Rs. 9,69,765.