1986 (6) TMI 124 - AT - Central Excise

Summary

Issues:
1. Delay in submitting D-3 documents for excise duty-paid material.
2. Consumption of goods without verification by the Central Excise Officer.
3. Disallowance of credit by the proper officer.
4. Appeal against the disallowance of credit.
5. Interpretation of procedural requirements under Rule 173K of the Central Excise Rules, 1944.
6. Application of the principle regarding procedural lapses in excise matters.
7. Justification for disallowing credit of duty already paid.

Analysis:
1. The department alleged that the respondents, manufacturers of tyres, received 20 tonnes of carbon black on a holiday and submitted the relevant D-3 documents a day late. The department contended that the respondents consumed the material without waiting for verification by the Central Excise Officer, violating Rule 56A. The proper officer disallowed the credit, which was upheld by the Assistant Collector but later allowed by the Collector of Central Excise (Appeals) based on a previous Tribunal decision.

2. The department argued that the respondents failed to inform the proper officer within 24 hours of receiving excise duty-paid material, as required by Rule 173K. The respondents' consumption of goods without verification was highlighted as a violation, urging the appeal to be set aside.

3. The respondents relied on a previous Tribunal decision to support their claim that they should not be denied proforma credit due to procedural technicalities. They explained that the urgent need for the materials justified their actions to avoid production delays.

4. The Tribunal analyzed the case, noting that the goods were received and duty paid, and used in production without dispute. The department's contention focused on procedural delays in submitting the D-3 document and the unavailability of goods for verification. The Tribunal emphasized that denying credit for procedural lapses, when goods were received, duty paid, and used for production, was unjustifiable.

5. The Tribunal dismissed the appeal, upholding the principle that procedural lapses should not result in denying the benefit of set off when the receipt, duty payment, and utilization of goods for production are established. The decision was based on the earlier Tribunal ruling that emphasized not penalizing the assessee for procedural violations when essential aspects are not in dispute.