1997 (11) TMI 190 - AT - Central Excise

Summary

Issues:
- Eligibility of Modvat credit on HDPE bags for packing cement
- Time limit for claiming Modvat credit
- Admissibility of penalty

The judgment revolves around an appeal challenging an order confirming a duty demand and imposing a penalty on the appellants. The appellants, cement manufacturers, used HDPE bags for packing cement. A dispute arose regarding the classification of HDPE bags, later resolved by a Board's letter. The Collector alleged illegal Modvat credit taken by the appellants and lack of prescribed records. The appellants claimed entitlement to Modvat credit based on the Board's clarification. The Collector passed an ex parte order after hearings were adjourned. The appellants argued that they were entitled to Modvat credit on HDPE bags used for packing cement before a specific date. They also contested the penalty imposed, citing case law supporting their position. The Department contended that the inputs were not eligible for Modvat credit as per Rule 57A. The appellants argued that the period for claiming credit should commence from the date of knowledge of relevant law. The Tribunal considered various legal precedents and held that the appellants were eligible for Modvat credit on HDPE bags used for packing cement during the relevant period. The Tribunal also found that the appellants' claim for Modvat credit was admissible within a reasonable time, as per legal standards. Consequently, the appeal was allowed, and the impugned order was set aside, granting the appellants the benefits under the law.

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