1997 (1) TMI 253 - AT - Central Excise

Summary

Issues:
1. Validity of Modvat credit on the basis of certified photocopy of gate pass.
2. Applicability of the extended period for demand due to suppression/misstatement.
3. Time limitation for demand of duty.

Analysis:

Issue 1: Validity of Modvat credit on the basis of certified photocopy of gate pass
The Commissioner of Central Excise disallowed the Modvat credit claimed by the appellants on the duty paid on paper coated strips, citing that Modvat credit cannot be availed based on a certified photocopy of the gate pass. The appellants argued that they had submitted RG 23A Part I and II along with the duty paying documents and RT 12 returns for assessment in April 1990, which were finalized. The Commissioner upheld the disallowance of credit without addressing the finalization of the RT 12 returns in his decision. The appellate tribunal noted that the law did not prohibit Modvat credit based on a certified copy of the gate pass and found no suppression or misstatement by the appellants. Consequently, the tribunal allowed the appeal on this issue.

Issue 2: Applicability of the extended period for demand due to suppression/misstatement
The department alleged suppression/misstatement and invoked the extended period for demand beyond six months. The appellants contended that there was no suppression, misstatement, or fraud to evade duty payment, making the demand time-barred. The tribunal observed that the demand was confirmed beyond six months from the date of taking credit, as per Rule 57-I, and found no evidence of suppression or misstatement. Therefore, the tribunal held that the demand was hit by limitation and allowed the appeal solely on this ground.

Issue 3: Time limitation for demand of duty
The key point for determination was whether the demand was within the statutory time limit. The tribunal noted that the communication from the Superintendent to reverse the Modvat credits or produce the original gate pass was issued beyond six months from the date of taking credit. Additionally, the RT 12 returns submitted by the appellants for assessment in April 1990 were finalized, indicating no provisional assessment during the relevant period. As there was no suppression or misstatement and the demand was confirmed beyond the six-month limit, the tribunal held that the demand was time-barred under the law.

In conclusion, the appellate tribunal allowed the appeal, finding that the demand of duty was time-barred due to the absence of suppression or misstatement and the confirmation of the demand beyond the statutory limitation period.