2004 (1) TMI 594 - AT - Central Excise

Summary

Issues: Modvat credit taken beyond 6 months from the date of invoice; Permission granted for outside storage; Denial of credit by original authority; Appeal rejection by Commissioner (Appeals).

The judgment revolves around the appellant taking Modvat credit of Rs. 53,538/- against an invoice dated 10-1-97, which was done beyond the prescribed 6-month period. The appellants justified this delay by explaining that due to space constraints in the factory, the goods were stored in a godown which later became an extension of the factory with permission from the Commissioner. The denial of credit was based on the fact that the credit was taken beyond the stipulated time limit. The original authority contended that the permission for outside storage granted on 17-1-97 could not regularize the storage before that date, deeming it illegal.

The Commissioner (Appeals) rejected the appeal on the grounds that the credit should have been taken within the 6-month limitation period. The judgment emphasized that the permission for outside storage retrospectively did not affect the availability of such permission within the limitation period. The denial of credit was based on the specific provision of Rule 57G(2) of the Central Excise Rules, 1944, introduced by Notification No. 28/95-C.E. (N.T.), dated 29-6-95. It was clarified that the permission for outside storage did not exempt the appellant from the 6-month time limit for taking credit, as per the Board's Circular dated 9-5-96.

Ultimately, the tribunal upheld the denial of credit, stating that in the absence of any other justifications provided for taking the credit beyond the 6-month period, the appeal was rejected. The judgment reaffirmed the importance of adhering to statutory time limits for claiming credits, irrespective of permissions granted for outside storage facilities.