2001 (7) TMI 180 - AT - Central Excise

Summary

Issues:
- Modvat credit denial based on time limitation for taking credit beyond 6 months from the date of issue of certificate under Rule 57E.
- Interpretation of the reasonable period for exercising power in absence of specific time limitation.
- Applicability of time limits for taking Modvat credit under Rule 57G.
- Distinction between judgments of the Hon'ble Supreme Court in different cases.
- Validity of taking additional or differential credit later despite crossing the limit specified in the condition.

Analysis:
1. The appeal involved the denial of Modvat credit by M/s. Rane Brake Linings Ltd. on the grounds of exceeding the time limitation of 6 months from the date of issue of the certificate under Rule 57E. The appellant took credit based on certificates issued beyond this period, leading to the dispute.

2. The appellant's consultant argued that the Commissioner (Appeals) relied on a judgment of the Hon'ble Supreme Court regarding exercising power within a reasonable period in the absence of specific time limitations. The consultant highlighted distinctions between various judgments, emphasizing that no specific time was fixed by law for issuing certificates under Rule 57E during the relevant period.

3. The consultant referred to a Tribunal judgment in Tata Engg. Locomotive Co. v. C.C.E., Bombay, which established the manufacturer's right to take credit of duty paid on specified inputs without additional conditions beyond Rule 57G. The consultant argued that the time limit for taking credit applied only to duty shown in specific documents, not to cases of subsequent duty payment, supporting the appellant's claim for Modvat credit.

4. The Departmental Representative reiterated the findings of the impugned order, emphasizing the established reasonable period of six months for taking credit. The Department's position was supported by previous decisions, including M/s. Brakes India Ltd., which upheld the six-month reasonable period for exercising such rights.

5. The Tribunal observed the distinctions made by the Hon'ble Supreme Court in different cases and the applicability of time limits for taking Modvat credit under Rule 57G. Citing precedents like C.C.E., Jaipur v. Parasrampuria Synthetics Ltd., the Tribunal concluded that the impugned order of the Commissioner (Appeals) was not legal. The appeal was allowed, setting aside the Commissioner's order and granting consequential relief, if any.