2007 (11) TMI 190 - AT - Central Excise

Credit denied on ground that the appellants in the declaration filed under sub-rule (1) of Rule 57-G of Central Excise Rules did not declare the final product Charging bar as per Rule 57-G amended by Notification No. 7/99 credit shall not be denied if all the particulars are not mentioned in the declaration, therefore, denial of credit in the present case is not sustainable

Summary

Issues:
Denial of credit for duty paid on inputs due to incomplete declaration under Rule 57-G of Central Excise Rules.

Analysis:
The appellants filed an appeal challenging the denial of credit for duty paid on inputs because the final product, Charging bar, was not declared in the sub-rule (1) declaration under Rule 57-G of Central Excise Rules. The appellants, engaged in manufacturing excisable goods, cleared the charging bar by paying Central Excise duty using Modvat credit. A show cause notice was issued, contending that since the charging bar was not declared as the final product, duty payment from the Cenvat credit account was not permissible.

Upon examination, it was found that Rule 57-G of the Central Excise Rules, during the relevant period, allowed credit on specified goods for any input utilized for excise payment on the final product as per the declaration filed under sub-rule (1) of Rule 57-G. The rule had been amended by Notification No. 7/99-C.E., dated 9-3-1999, stating that credit cannot be denied if the declaration did not contain all required details or if the manufacturer failed to comply with other requirements under sub-rule (1). Citing the case of Kamakhya Steels (P) Ltd. v. CCE Meerut, where it was held that the amendment applies to pending cases, the denial of credit in the present case was deemed unsustainable. Since the rule allowed credit utilization for specified duty towards excise payment for the final product as per the declaration under Rule 57-G, the impugned order was set aside, and the appeal was allowed.

In conclusion, the judgment highlighted the importance of compliance with the declaration requirements under Rule 57-G of the Central Excise Rules for availing credit on duty paid inputs. The amendment prohibiting denial of credit for incomplete declarations, even in pending cases, was crucial in determining the appellants' entitlement to utilize Modvat credit for duty payment on the charging bar. The decision emphasized the significance of adherence to statutory provisions and amendments in resolving disputes related to credit denial based on declaration discrepancies.