1995 (8) TMI 115 - AT - Central Excise

Summary

Issues:
Whether the appellant is ineligible for Modvat credit due to the filing location of the declaration and delay in acknowledgment.

Detailed Analysis:
The appeal challenges the order of the Collector of Central Excise, Hyderabad, questioning the appellant's eligibility for Modvat credit based on the filing location of the declaration. The appellant filed a declaration addressed to the Asstt. Collector but handed it over in the office of the Collector of Central Excise. The department argued that the appellant was not entitled to Modvat credit due to this procedural error. However, the appellant contended that the filing of the declaration is mandatory, and a procedural infraction should not affect their eligibility for Modvat credit. They highlighted that the duty paid inputs were available when the acknowledgment was received from the Asstt. Collector, enabling them to take the credit and utilize it later.

The Tribunal considered the submissions and emphasized that the filing location of the declaration should not automatically disqualify the appellant from claiming Modvat credit. They referred to previous cases to support the view that procedural irregularities should not hinder a party entitled to Modvat credit from availing it. The Tribunal noted that the purpose of filing a declaration is to facilitate the department in allowing Modvat credit, and substantial compliance should be sufficient. Therefore, they concluded that the impugned order was not sustainable, setting it aside and allowing the appeal.

In a separate assent, another Member of the Tribunal reiterated the importance of filing a declaration as per Rule 57G for claiming Modvat credit. They cited previous cases where the failure to file a declaration led to the reversal of Modvat credit. The Member highlighted a Supreme Court case emphasizing the significance of timely filing of declarations for availing benefits. They stressed that the requirement of filing a declaration and obtaining a dated acknowledgement is crucial when the benefit is contingent upon such filing.

Regarding the specific case, it was noted that the appellant filed the declaration with the Collector's office but received acknowledgment from the Assistant Collector after a delay. Despite the procedural error in filing the declaration at the wrong office, the Member acknowledged that the duty paid inputs were available when the acknowledgment was received. Therefore, they concluded that the Modvat credit taken and utilized by the appellant was valid, considering the availability of inputs and compliance with Rule 57G on the date of acknowledgment.

In conclusion, the Tribunal upheld the appellant's right to claim Modvat credit despite the procedural irregularity in filing the declaration, emphasizing substantial compliance and the availability of duty paid inputs when the acknowledgment was received as crucial factors in determining eligibility for Modvat credit.