1997 (11) TMI 293 - AT - Central Excise

Summary

Issues: Availment of Modvat credit on duty paid inputs old ship breakings before filing prescribed declaration, Condonation of delay in filing declaration under Rule 57G of Central Excise Rules, Recovery of credit already utilized, Applicability of Rule 57G(5) of Central Excise Rules

In this case, M/s. Sood Steel India (P) Ltd. appealed regarding the availment of Modvat credit on duty paid inputs old ship breakings before filing the prescribed declaration. The appellants availed Modvat credit of Rs. 20,662 on 31-7-1995 without declaring ship breaking material as an input in the Modvat declaration under Rule 57G of the Central Excise Rules, 1944. The declaration regarding ship breaking material was filed on 5-8-1995, received by the Asstt. Collector on 14-8-1995. The Asstt. Commissioner confirmed the demand of Rs. 20,662, which was upheld by the Commissioner of Central Excise (Appeals), Chandigarh.

Shri K.K. Anand, Advocate for the appellant, argued that the delay in filing the declaration was due to receiving ship breaking scrap for the first time, and relied on Rule 57G(5) to request condonation of the delay. On the other hand, Shri D.K. Nayyar, JDR for the respondent, contended that since the credit had already been availed and utilized, the delay could not be condoned. The Asstt. Commissioner's decision to recover the credit was justified.

Upon careful consideration, the Tribunal observed that the credit was availed on 31-7-1995, while the declaration for ship breaking material was filed on 5-8-1995. Rule 57G(5) allows for condonation of delay in filing declarations under certain conditions, including that the inputs were received within six months of filing the declaration and were utilized in manufacturing. However, no application for condonation was made until 22-1-1996, after the credit had already been utilized.

The Tribunal noted that the show cause notice alleged recovery of the amount under Rule 57-I(ii) of the Central Excise Rules, indicating that the credit had been utilized. As Rule 57G(5) conditions were not met, the Tribunal concluded that the credit was rightly denied. Considering all aspects, the appeal was dismissed as lacking merit.