1997 (1) TMI 331 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat credit by the appellant company.
2. Alleged contravention of Rule 57A and Rule 57G.
3. Imposition of penalty by the Assistant Commissioner.
4. Appeal against the Assistant Commissioner's order.

Analysis:

Availment of Modvat Credit:
The appellant company, a manufacturer of Refined Lead, claimed Modvat credit for inputs. They filed a declaration under Rule 57G(1) of the Central Excise Rules, 1944, followed by a reminder when the acknowledgement was not received promptly. The Assistant Commissioner acknowledged the reminder but referenced the wrong communication. The appellant received inputs during this period but did not avail credit until after the dated acknowledgement. The show cause notice alleged contravention of rules, leading to disallowance of credit and imposition of a penalty.

Alleged Contravention of Rules:
The show cause notice issued to the appellant alleged contravention of Rule 57A and Rule 57G for not following the procedure correctly in availing Modvat credit. The Assistant Commissioner disallowed a portion of the credit and imposed a personal penalty, which led to the appeal before the Tribunal.

Imposition of Penalty:
The Assistant Commissioner disallowed a portion of the Modvat credit and imposed a personal penalty on the appellant. The appellant contested this decision, leading to an appeal before the Tribunal.

Appeal Against the Assistant Commissioner's Order:
The appellant appealed against the Assistant Commissioner's order disallowing credit and imposing a penalty. The appellant's counsel argued that the credit was availed following due procedure and cited relevant tribunal decisions to support their case. The JDR argued that accepting the appellant's stance would render Rule 57H redundant, which allows credit for inputs received before obtaining acknowledgement.

The Tribunal considered both arguments and noted the acknowledgment of the reminder by the Assistant Commissioner. The Tribunal observed that the delay in acknowledgment should not prejudice the appellant, as it was beyond their control. The Tribunal found that the credit was availed after receiving the acknowledgment, even though the inputs were received earlier. Additionally, the Tribunal noted that the appellant would likely have obtained permission under Rule 57H. Therefore, the Tribunal allowed the appeal, setting aside the Assistant Commissioner's order and granting the Modvat credit to the appellant.