2007 (8) TMI 112 - AT - Central Excise

Cenvat/Modvat - Due to the clerical mistake in the entry of duty amount respondent delay more than the six month in availing the credit is consider as inadmissible by the revenue but allowed by the Commissioner (A) is also upheld by tribunal

Summary

Issues:
Challenge to Commissioner (Appeals) order setting aside Cenvat credit and imposing penalty.

Analysis:
The case involved a challenge by the Revenue against the order of the Commissioner (Appeals) dated 28-3-2005, which set aside the Assistant Commissioner's decision to set aside Cenvat credit of Rs. 45,000/- and impose a penalty of Rs. 5,000/-. The respondent, engaged in the manufacture of Plastic Laminated & Unlaminated Film, availed Modvat credit facility on inputs under Rule 57A of the Central Excise Rules, 1944. An issue arose when the respondent received 5000 kgs. of plastic granules under an invoice dated 26-3-1997 but entered a lower amount of Rs. 11,400/- in the register instead of the total duty paid amount of Rs. 57,000/-. The Assistant Commissioner held that the differential amount credited beyond six months from the date of the invoice was not admissible under Rule 57G(5) of the Rules.

The Department's representative argued that the Commissioner (Appeals) erred in overturning the Assistant Commissioner's decision, citing Rule 57G(5) which prohibits taking credit after six months of the date of issue of the document. However, the Tribunal found that the initial credit entry made within six months of the invoice date was a clerical error, and rectifying it did not change the original entry's date. Relying on previous Tribunal decisions, the Commissioner (Appeals) correctly determined that the time taken to rectify the error should not be counted towards the six-month period. Consequently, the Tribunal dismissed the appeal, upholding the legality and correctness of the Commissioner (Appeals) order.

In conclusion, the Tribunal's decision affirmed that the rectification of a clerical error in the initial credit entry did not affect the admissibility of the credit taken within the stipulated time frame under Rule 57G(5) of the Central Excise Rules, 1944. The Commissioner (Appeals) was found to have made a legally sound decision based on established precedents, warranting no interference by the Tribunal. The appeal by the Revenue was consequently dismissed.