1996 (9) TMI 418 - AT - Central Excise

Summary

Issues:
1. Time-barred show cause notice for irregular availment of Modvat credit.
2. Jurisdictional issues regarding the authority issuing the notice.
3. Admissibility of Notification 198/86 for PVC compound.
4. Interpretation of Rule 57-I regarding time limit for issuing notice.
5. Eligibility for credit under Rule 57H for inputs received before filing declaration.
6. Deemed credit admissibility based on certificates from a Public Sector Undertaking.

Analysis:

1. The appellants, manufacturers of electric wires and cables, faced objections regarding irregular availment of Modvat credit. The Assistant Collector confirmed a duty demand of Rs. 9,54,687.32 under Rule 57-I of Central Excise Rules. The Collector (Appeals) partially allowed the appeal, directing consideration of Notification 198/86 for PVC compound and notional credit benefit. The appellants challenged this decision.

2. The appellants argued that the show cause notice issued in 1986 was time-barred as it was based on credit taken more than six months earlier. They contended that only the Collector, not the Superintendent, could issue the notice. Lack of effective personal hearing and jurisdictional issues were raised. The appeal emphasized legal questions and jurisdictional concerns.

3. The Tribunal noted that the Collector (Appeals) remanded the case for determining the demand amount and considering Notification 198/86. The focus was on legal issues and the admissibility of PVC compound credit, directing the Assistant Collector to address this if not already done.

4. The Tribunal analyzed the time-bar issue, finding the notice valid under Rule 57-I and Section 11A. The absence of a time limit in Rule 57-I at the notice's issuance did not render it time-barred. The retrospective application of amendments was rejected, emphasizing the rule's version at the time of the alleged irregularities.

5. Regarding eligibility for credit under Rule 57H for inputs received before declaration filing, the appellants' justification was evaluated. The Tribunal highlighted the need to fulfill Rule 57H terms and directed a fresh decision on disallowed credits based on Public Sector Undertaking certificates.

6. The appeal was allowed for remand to address unresolved issues comprehensively, including the eligibility for Rule 57H credit and the adequacy of deemed credit based on certificates. The Tribunal rejected jurisdictional, limitation, and natural justice denial claims, emphasizing a thorough reevaluation by the Assistant Collector.