2000 (2) TMI 151 - AT - Central Excise

Summary

Issues:
1. Admissibility of modvat credit without filing declaration under Rule 57H of the Central Excise Rules, 1944.
2. Imposition of penalty for non-compliance with procedural requirements.

Issue 1: Admissibility of modvat credit without filing declaration under Rule 57H:
The appellants, engaged in manufacturing B.A. Wire, availed Modvat credit without filing a declaration under Rule 57H. The department alleged contravention of Rule 57H and 57A, issuing a Show Cause Notice (SCN) for credit recovery and penalty imposition. The appellants contended that filing the declaration was a procedural formality and should not disallow the credit. The Asst. Commissioner confirmed the demand, which was upheld by the Commissioner (A). The appellants argued that they were new to Central Excise procedures, unaware of the requirement under Rule 57H. The ld. Advocate cited the Safex Fire Services case, emphasizing the procedural nature of the requirement. The JDR argued that Rule 57H was specific and mandatory, not procedural. The Tribunal noted that while the appellants maintained records, the declaration under Rule 57H was not filed, essential for substantiating duty paid and quantity of inputs. The Tribunal held that the requirement of Rule 57H was not complied with, rejecting the appeal.

Issue 2: Imposition of penalty for non-compliance with procedural requirements:
Regarding the penalty, the Commissioner (A) waived it off, considering the appellants' new registration and circumstances. The ld. Advocate submitted that the penalty imposition was uncalled for, given the procedural oversight. The JDR argued for the penalty's confirmation, emphasizing the mandatory nature of Rule 57H. The Tribunal, after reviewing the evidence and case law, rejected the appeal, noting the absence of essential details in the records and the failure to comply with Rule 57H. The Tribunal found that the appellants' documents did not support their case, emphasizing the specific purpose of the declaration under Rule 57H. The appeal was rejected based on non-compliance with the mandatory requirement of filing the declaration, leading to the inadmissibility of modvat credit without fulfilling Rule 57H's provisions.