2002 (11) TMI 207 - AT - Central Excise

Summary

Issues:

1. Denial of credit of duty paid on M.S. Plates for manufacturing pipes under Modvat scheme.
2. Interpretation of Rule 57G of Central Excise Rules regarding the time limit for taking credit.
3. Dispute over the date from which the time limit for taking credit should be calculated.
4. Applicability of previous tribunal decisions in similar cases to the present situation.

Analysis:

1. The Maharashtra Krishna Valley Development Corporation, a government undertaking, was denied credit of around Rs. 1.3 crore for M.S. Pipes by the Commissioner of Central Excise and Customs, Pune. The denial was based on the ground that credit was taken after six months of the date of issue of the invoices, which is a condition under Rule 57G of the Central Excise Rules. However, the appellant argued that the delay was due to defective invoices from the supplier, Steel Authority of India, which were later corrected, and credit was taken within six months of the corrected invoices.

2. The dispute revolved around the interpretation of Rule 57G and whether the time limit for taking credit should be calculated from the original date of the invoices or the date of the corrected invoices. The appellant contended that the time limit should start from the corrected invoices as the delay was caused by the supplier's mistake, and previous tribunal decisions supported this argument by excluding time consumed due to unforeseeable circumstances while computing the time limit.

3. The appellant's case was supported by referencing previous tribunal decisions, such as Assistant CCE, Hyderabad-IV Division v. Sun-up Botanics (Pvt.) Ltd., Natraj Engineers Pvt. Ltd. v. CCE, Patna, and CCE, Hyderabad-I v. Crest Cables Ltd. These cases emphasized that time spent on rectification of mistakes or delays caused by external factors should be excluded from the time limit calculation. In this case, the delay in taking credit was due to the need for rectification of invoices, which was beyond the control of the appellant.

4. The Tribunal, in agreement with the appellant's arguments and supported by previous decisions, ruled in favor of the appellant. The impugned order denying credit was set aside, and the appeal was allowed, providing consequential relief to the appellants. The judgment highlighted the importance of considering unforeseeable circumstances and external factors that may cause delays in compliance with excise rules and regulations.