2011 (8) TMI 116 - AT - Central Excise

Cenvat credit - Classification - Rule 57G of Central Excise Rules, 1944 - It was held that there was no proper documents, entry in the statutory records was delayed and the credit was availed on the basis of endorsement and this amounts to contravention of provisions of Rule 57-I, with intention to evade duty and therefore attracts the provisions of sub Section 1 of Section 11A of Central Excise Act, 1944 - Once the extended time limit has been invoked by invoking proviso to Section 11A, the question whether the same can be invoked or not, is to be considered - whether there was any suppression/ mis-declaration or fraud, the appellants have written a letter on 02.01.1989 to Superintendent explaining the facts and I find that there is no dispute about the correctness of the facts incorporated in the letter dated 02.01.1989 - Appeal is allowed

Summary

Issues:
1. Modvat credit denial on Oleum.
2. Modvat credit denial on acid slurry.

Analysis:

Issue 1: Modvat credit denial on Oleum
The appellant's modvat credit on Oleum was denied due to non-filing of declaration as required under Rule 57G of Central Excise Rules, 1944. The appellant argued that Oleum is essentially Sulphuric Acid in another form, both falling under the same heading. The Tribunal referenced a previous case where it was established that if the correct input heading is declared and described accurately, modvat credit should be granted. As the appellant declared Sulphuric Acid but not Oleum, the credit taken on Oleum was deemed admissible and upheld.

Issue 2: Modvat credit denial on acid slurry
The appellant faced credit denial on acid slurry as it was seized by officers and later provisionally released. Despite the appellant's claim that the material was entered into their records with proper documentation, the credit was rejected. The Commissioner found a lack of proper documents, delayed entry in statutory records, and utilization of credit based on an endorsement, indicating intent to evade duty. The Tribunal agreed with the Commissioner that the appellant failed to explain why the goods meant for a unit in Tiraputur ended up in their Silvassa unit. While the demand was issued beyond the six-month limit, the extended time limit under Section 11A was invoked. However, as there was no evidence of suppression or mis-declaration, the invocation of the extended period for confirming the demand was deemed unsustainable.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant.