1992 (5) TMI 113 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 57H and Rule 57G for availing MODVAT Credit.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras involved a dispute regarding the availing of MODVAT Credit by the respondents for inputs received between 1-3-1986 and 31-3-1986. The Department challenged the order allowing MODVAT Credit by the Collector of Central Excise (Appeals), Madras. The Department argued that Rule 57H and Rule 57G necessitate the filing of a declaration for availing MODVAT Credit before 31-3-1986. On the other hand, the respondents contended that Rule 57H does not mandate the filing of a declaration between 1-3-1986 and 31-3-1986, citing a previous ruling in support of their argument.

Upon considering the submissions, the Tribunal analyzed Rule 57H and Rule 57G. The Tribunal observed that Rule 57H allows the assessee to take MODVAT Credit if the inputs were received between 1-3-1986 and 31-3-1986, irrespective of the declaration filing date. Notably, Rule 57H contains a non obstante clause, emphasizing that the Assistant Collector may allow credit before the filing of a declaration under Rule 57G. The Tribunal rejected the Department's argument, stating that filing a declaration after receiving inputs between 1-3-1986 and 31-3-1986 does not disentitle the assessee from claiming MODVAT Credit under the transitional provisions. The Tribunal upheld the impugned order, citing support from a previous ruling by the North Regional Bench.

In a concurring opinion, another Member of the Tribunal highlighted the introduction of the MODVAT Scheme from 1-3-1986 and the transitional provision under Rule 57H to address initial difficulties. The Member emphasized that Rule 57G requires a declaration for availing MODVAT Credit from the filing date, while Rule 57H provides an exception to claim credit for inputs received before filing the declaration. The Member dismissed the Department's argument that filing a declaration after 31-3-1986 creates incongruity, asserting that the transitional provision does not impose a specific timeline for declaration filing. Consequently, the Tribunal held that the assessee is eligible for MODVAT Credit for inputs received between 1-3-1986 and 31-3-1986 under Rule 57H, and dismissed the Revenue's appeal.