2007 (2) TMI 400 - AT - Central Excise

Summary

Issues:
The issue involved in this case is the grant of Modvat credit under Rule 57T of the Central Excise Rules, 1944, specifically related to the timing of filing the declaration for receipt of capital goods.

Summary:

Issue 1: Modvat credit not granted due to mis-construction of Rule 57T
The appellant's counsel argued that Modvat credit was not granted due to a misinterpretation of Rule 57T by the authorities, who held that the declaration for receipt of capital goods was filed beyond the stipulated three months. The counsel contended that sub-rule (13) of Rule 57T, which was inserted later, should be applied to all pending cases to remove hardships faced by the assessee. Citing a judgment from the Hon'ble High Court of Rajasthan, the counsel emphasized that denial of Modvat credit would defeat the spirit of justice and lead to tyranny.

Issue 2: Applicability of Circular No. 441/7/99-CX
The appellant's counsel highlighted Circular No. 441/7/99-CX, issued to address pending cases related to Rule 57T, even before the insertion of sub-rule (13). The circular aimed to ensure justice for aggrieved parties facing difficulties due to procedural lapses. The counsel also referenced a reported judgment supporting the application of such circulars to prevent procedural hurdles from obstructing justice.

Issue 3: Precedent and Tribunal's past decisions
The appellant's counsel referred to a past case involving similar issues, Dholai Tea Company Pvt. Ltd. v. Commissioner of Central Excise, Shillong, to support the argument for granting Modvat credit. The Tribunal's handling of comparable matters in the past was also mentioned to strengthen the appellant's case.

Conclusion:
After considering the arguments, the judgment of the Hon'ble High Court of Rajasthan, relevant statutory provisions, and the submissions of both sides, it was concluded that the appellant was entitled to the Modvat credit. Compliance with substantial legal provisions and the fulfillment of conditions warranted the grant of credit, despite procedural challenges. The appeal was allowed, and the appellant was granted the Modvat credit, overturning the first appellate order on the specific issue.