1991 (2) TMI 263 - AT - Central Excise

Summary

Issues:
Denial of MODVAT credit for the transitional period due to the timing of the application under Rule 57H.

Analysis:
The appeal was filed against the denial of MODVAT credit for the transitional period as the application was submitted after the specified deadline. The Assistant Collector rejected the credit, stating that the application was filed after the deadline of two months from the last eligible date. The Collector of Central Excise (Appeals) upheld this decision, leading to the appeal.

The appellant's counsel argued that Rule 57H(1) did not mandate a specific time limit for filing the application for availing MODVAT credit for the transitional period. He emphasized that the rule did not require a separate application or declaration for availing the benefits under Rule 57H(1). The appellant had submitted a declaration on 31-3-1986, acknowledging the intention to use inputs for the MODVAT Scheme, which was considered timely. The counsel contended that the authorities misunderstood the procedural requirements of Rule 57H.

The respondent's representative acknowledged the procedural misunderstanding by the lower authorities and agreed that the issue should be reconsidered on its merits. The appellant also consented to remanding the matter for a review on the merits of the case.

Upon reviewing the submissions and provisions of Rule 57H, the Tribunal agreed with the appellant's argument that no specific time limit was prescribed for filing the application under Rule 57H(1). As the issue of eligibility on merits was not addressed initially, the Tribunal remanded the matter to the Assistant Collector for a thorough examination and to grant the credit if found permissible.

In a separate observation, another Member of the Tribunal noted that while the rule did not specify a deadline for filing the application, a reasonable time frame should be considered. The Member emphasized that the Assistant Collector erred in presuming a deadline of 31 March 1986 for filing the application. The Member set aside the impugned order and directed the Assistant Collector to review the case on its merits and issue appropriate orders.

In conclusion, the Tribunal allowed the appeal by remanding the matter for a detailed examination on the merits of granting MODVAT credit for the transitional period, emphasizing the absence of a specific time limit for filing the application under Rule 57H(1).