2000 (8) TMI 113 - AT - Central Excise

Summary

Issues Involved:
Whether an assessee can avail Modvat credit in respect of inputs (Sponge Iron) without filing a declaration.

Comprehensive Details:
The appellants, manufacturers of Iron and Steel products, had initially omitted to include Sponge Iron in their Modvat declaration as it was exempt from duty. However, when Sponge Iron became dutiable, they took Modvat credit for the quantities received under valid duty paying documents. Although they later filed a supplementary declaration explicitly including Sponge Iron, demands in the appeals were related to periods prior to this amendment. The party argued that the Modvat provisions were substantively complied with, and the omission was a procedural lapse. The Hon'ble Vice President referred the issue to the Larger Bench due to conflicting views within the Tribunal on the importance of the declaration as a substantive requirement.

Arguing for the appellant, it was contended that the bona fides of the appellants were not in doubt, and the Modvat benefit should not be denied based on a procedural lapse. The filing of the declaration was seen as a procedural compliance to enable the department to verify Modvat scheme coverage. On the other hand, the Revenue argued that the Modvat credit should be denied as filing a declaration under Rule 57G is a statutory requirement and any lapse in this regard is not condonable.

An intervener suggested remanding the matter to the Adjudicating Authority to consider the issue in light of the amendment to Rules 57G and 57T as per Notification No. 7/99-C.E. (N.T.), dated 9-2-1999, and relevant Circulars. Referring to the amendment, it was highlighted that the credit shall not be denied for certain grounds, including incomplete declaration details. The Circulars were deemed binding on the authorities, and the Supreme Court's decision emphasized that proceedings include appellate stages. Consequently, the matter was remanded to the Jurisdictional Assistant Commissioner for re-examining the admissibility of Modvat credit for the relevant period covered under the appeal.

Therefore, the Tribunal decided to remand the matter for further examination in light of the amended provisions and Circulars, emphasizing the importance of substantive compliance with Modvat requirements and the need to consider the specific circumstances of the case.