1994 (11) TMI 229 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for Modvat Credit
2. Jurisdiction of the Superintendent to issue notice
3. Applicability of Section 11A
4. Validity of the notice issued under Rule 57-I
5. Time-barred demand for Modvat credit

Detailed Analysis:

1. Eligibility for Modvat Credit:
The primary issue revolves around whether M/s. Brite Automotive & Plastics Ltd. (Brite) is eligible for Modvat Credit for inputs used in manufacturing final products not mentioned in their declaration under Rule 57G(1) of the Central Excise Rules, 1944. The Collector of Central Excise (Appeals) upheld the Assistant Collector's decision that Brite was ineligible for Modvat Credit for these inputs, but set aside the demand for the period beyond six months from the date of credit.

2. Jurisdiction of the Superintendent to issue notice:
Brite contended that the notice issued by the Superintendent under Rule 57-I lacked jurisdiction, arguing that only the Collector should issue such a notice when the longer period of limitation is involved. They cited Tribunal decisions in Reine Chemicals v. Collector of Central Excise and Synpack (P) Ltd. v. Collector of Central Excise to support their claim.

3. Applicability of Section 11A:
Brite argued that the provisions of Section 11A, which require the Collector to issue the notice, should come into play automatically. They asserted that the Superintendent was not the competent officer to issue the notice for the longer period of limitation.

4. Validity of the notice issued under Rule 57-I:
The Tribunal held that the notice issued by the Superintendent was valid under the amended Rule 57-I, which allows the proper officer to issue such notices. The Tribunal disagreed with Brite's contention that Section 11A should prevail over Rule 57-I, emphasizing that Rule 57-I is a specific provision dealing with Modvat cases, whereas Section 11A deals with general cases of short levy or non-levy.

5. Time-barred demand for Modvat credit:
The Collector of Central Excise (Appeals) had held part of the demand to be time-barred for the period beyond six months from the date of issue of the notice. The Tribunal agreed with this decision, noting that the extended period would only be applicable in cases involving wilful mis-statement, collusion, or suppression of facts, which was not the case here. The Tribunal also noted that the non-declaration of final products was known to the Department, and the wrong utilization of credit was disclosed by Brite in their returns.

Conclusion:
The Tribunal dismissed Brite's appeal on the question of eligibility for Modvat Credit, affirming that the non-inclusion of final products in the declaration was fatal to their claim. The Tribunal also dismissed the appeal filed by the Collector challenging the decision of the Collector (Appeals) regarding the time-barred demand, holding that the provision in force at the time of the notice's issue would govern the notice. The cross objection filed by Brite was also disposed of as both appeals were dismissed.