1993 (11) TMI 161 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal confirming reversal of MODVAT Credit and imposition of personal penalty.
- Compliance with MODVAT Rules regarding credit availment without written approval.
- Eligibility for MODVAT Credit on inputs declared under Rule 57G.
- Verification of inputs by the department for credit availment.
- Granting waiver of pre-deposit for further verification by Assistant Collector.

Analysis:
The appeal was filed against the Order-in-Appeal confirming the reversal of MODVAT Credit and imposition of a personal penalty by the Assistant Collector. The appellants opted for the MODVAT Scheme and filed a declaration under Rule 57G, along with an application under Rule 57H for credit availment on inputs in stock. The department objected to the credit availment without written approval, leading to a Show Cause Notice. The appellants argued compliance with MODVAT Rules and cited a Tribunal decision in support. The Advocate for the appellants emphasized that the inputs were verified by authorities and were utilized for manufacturing excisable products, referencing a previous Tribunal decision where similar credit was allowed.

The JDR supported the order, alleging a violation of Rules regarding credit availment without approval. The Tribunal noted that the appellants were eligible for MODVAT Credit on declared inputs and had applied for credit on the same day as the declaration. While the appellants availed credit without written approval, it was deemed that they were eligible for it. However, there was a lack of material to show proper verification of inputs. The Tribunal decided to allow the Assistant Collector to re-examine the issue, verify records, and grant credit for eligible inputs. The orders of the lower authorities were set aside, and the appellants were deemed eligible for MODVAT Credit on inputs as of the declaration date, subject to verification by the Assistant Collector.

In conclusion, the Tribunal granted waiver of pre-deposit for further verification by the Assistant Collector and held the appellants eligible for MODVAT Credit on inputs declared under Rule 57G. The decision emphasized the need for proper verification by the department and directed the Assistant Collector to scrutinize records and sanction credit for inputs proven to be in stock on the declaration date.