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1990 (1) TMI 186 - AT - Central Excise
Issues: Interpretation of Rule 57-0 of the Central Excise Rules regarding the availment of credit on inputs without filing a declaration.
In this case, the appeal was against an order directing the appellants to expunge the credit taken for a consignment of Cotton seed oil as per Central Excise Notification 27/87 and Rules 57K and 57-0 of the Central Excise Rules, 1944. The appellant contended that although they had not filed the required declaration at the time of taking credit, they later filed it and should be allowed to avail the credit retrospectively. The key argument was that Rule 57-0 should be construed in their favor as there was no express prohibition on availing credit for inputs already utilized in the end-product without initially taking credit. The Tribunal considered the scope of Rule 57-0 and emphasized that filing a declaration is a prerequisite for availing credit on inputs. The rule mandates that a manufacturer must file a declaration with the Assistant Collector of Central Excise, specifying the inputs intended to be used in the final products, before taking credit. The Tribunal concluded that the appellant's failure to file the declaration at the time of taking credit for Cotton seed oil was fatal to their claim. Therefore, the appeal was dismissed, affirming the order to expunge the credit taken for the input consignment. This judgment clarifies the strict procedural requirements under Rule 57-0 for manufacturers to file a declaration before availing credit on inputs. It highlights that filing a declaration is a mandatory condition precedent for taking credit on inputs, emphasizing the importance of compliance with statutory obligations. The Tribunal's interpretation underscores the significance of adhering to procedural rules in excise matters and the consequences of non-compliance. The decision serves as a reminder to manufacturers to ensure strict adherence to procedural requirements to avoid adverse consequences such as disallowance of credit.
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