2007 (11) TMI 158 - AT - Central Excise

Procedural non-compliance declaration of input lying with appellant not filed properly but application filed for new registration non-compliance of rule 9A - Appellant having suffered duty on the input and that not being contradicted by any cogent evidence on record - transitional provision introduced through Rule 9A of CC Rules has not taken away right to set off the input credit against the duty on final product - procedural irregularity should not prevent the Appellant to take credit

Summary

Issues involved:
Interpretation of Rule 9A of Cenvat Credit Rules, 2002 regarding transitional provisions and procedural compliance.

Analysis:

The ld. Consultant for the Appellant argued that the Department's proceedings were misconceived due to the new set off Rule coming into force on 25-3-2003, which was incorporated into the Cenvat Credit Rules, 2002. He contended that the Appellant disclosed the input as on 31-3-2003 to the Department with relevant documents proving duty payment, followed by a declaration filed on 9-5-2003 before the ld. Commissioner of Central Excise, Kolkata. The Consultant emphasized that the declaration was submitted within the due date of 15-6-2003, even though the Department raised a demand based on a technicality. He argued that the impugned order was unsustainable on this ground.

The ld. SDR for Revenue acknowledged that the declaration was indeed filed on 9-5-2003, as evident from page 21 of the record. However, he pointed out that the document on page 21 was an application for new registration, casting doubt on whether the Appellant complied with Rule 9A. This raised concerns about the Appellant's adherence to the law in the eyes of the Authorities.

Upon hearing both sides and examining the record, it was undisputed that the Appellant had filed a stock statement showing the opening balance as on 1-4-2004, including the credit of duty to be availed. The quantum of CENVAT credit available to the Appellant was clearly shown on page 24 of the Appeal record, with no disagreement from the Department. The Tribunal noted that the Appellant had the right to set off the input credit against the excise liability, as the Appellant had already paid duty on the inputs without any contradictory evidence on record. Therefore, despite procedural irregularities, the Appellant was entitled to its legitimate due under Rule 9A. Consequently, the Appeal was allowed, and the impugned Order was set aside.

In conclusion, the Tribunal's decision emphasized the importance of substantive rights granted to the Appellant under Rule 9A of the Cenvat Credit Rules, 2002, ensuring that procedural irregularities should not hinder the Appellant from receiving their rightful entitlements.