1997 (7) TMI 402 - AT - Central Excise

Summary

Issues:
1. Whether the appellant is entitled to Modvat credit on "Oleum" as an input for their final product.
2. Whether the time limit for recovery of Modvat credit is applicable in this case.

Analysis:

Issue 1:
The appellant, a chemical manufacturer, claimed Modvat credit on "Oleum" along with "Sulphuric Acid" as inputs for their final product. The appellant argued that "Oleum" is another variety of Sulphuric Acid and falls under the same Heading as Sulphuric Acid. They contended that their declaration of Sulphuric Acid as an input covers "Oleum" as well. The appellant consistently submitted RG 23A Part I & II Accounts and RT 12 returns mentioning the Modvat credit on "Oleum." The appellant's advocate emphasized that the Modvat credit was rightfully claimed, and there was no suppression of facts. The Tribunal noted that both "Oleum" and "Sulphuric Acid" fall under the same Heading, and "Oleum" is known as "Fuming Sulphuric Acid," a variety of Sulphuric Acid. Considering the correct declaration of Heading and description of the input, the Tribunal held that the Modvat credit on "Oleum" should not be denied to the appellant. The appeal was allowed in favor of the appellant.

Issue 2:
The respondent argued that there was a clear non-declaration of "Oleum" as an input, making the demand for recovery of Modvat credit sustainable. They contended that the appellant's failure to specifically mention "Oleum" or "Fuming Sulphuric Acid" in declarations showed defiance to directives. The respondent claimed that the limitation period of five years applied due to the appellant's actions. However, the Tribunal observed that the appellant consistently declared the Modvat credit on "Oleum" in their returns and accounts. As a result, the Tribunal held that the case was time-barred concerning the recovery of Modvat credit. The appeal was allowed, granting consequential reliefs to the appellant.

In conclusion, the Appellate Tribunal ruled in favor of the appellant, allowing the appeal and holding that the Modvat credit on "Oleum" should not be denied. The Tribunal emphasized the correct declaration of inputs and the consistent submission of accounts and returns by the appellant as crucial factors in determining the entitlement to Modvat credit and the applicability of the time limit for recovery.