1992 (7) TMI 211 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57H regarding MODVAT credit eligibility.
2. Effect of rule amendment on MODVAT credit entitlement.
3. Compliance with mandatory provisions for availing MODVAT credit.

Analysis:
1. The appeal challenged an order directing the reversal of MODVAT credit by the Collector of Central Excise. The appellant received duty-paid inputs and sought MODVAT credit after a rule amendment on 1-3-1987. The appellant contended that the amended rule allowed for MODVAT credit eligibility, emphasizing liberal construction of the MODVAT Scheme and reliance on a Supreme Court ruling regarding interpretation of notifications.

2. The appellant argued that the rule amendment on 1-3-1987, allowing MODVAT credit, should be considered procedural and applicable to their case. The authorities, however, contended that the unamended rule was in force when the appellant filed a declaration, making MODVAT credit inadmissible. The issue revolved around the timing of the rule amendment and its impact on MODVAT credit entitlement.

3. The Tribunal examined Rule 57H in light of the rule amendment, which permitted credit for duty-paid inputs received before filing a declaration. The Tribunal interpreted 'immediately received' liberally, allowing for credit eligibility if conditions were met. It emphasized that the amended rule, in force when permission was granted to the appellant, should govern MODVAT credit eligibility. The Tribunal held that the appellant was entitled to MODVAT credit, setting aside the impugned order and allowing the appeal.

4. Member (T) concurred with the decision, emphasizing that the appellant's request for MODVAT credit aligned with the amended rule in effect at the time. Member (T) disagreed with the retrospective application of the rule amendment but affirmed that the appellant met the conditions for credit eligibility under the amended Rule 57H. Member (T) highlighted the purpose of the MODVAT Scheme to prevent duty cascading and concluded that the appellant's plea should be allowed based on the interpretation of 'immediately received' and the applicability of the amended rule.

This judgment clarifies the eligibility criteria for MODVAT credit under Rule 57H, emphasizing the importance of rule amendments and compliance with procedural requirements for availing such credit.