1998 (11) TMI 310 - AT - Central Excise

Summary

Issues:
1. Dispensation with the requirement of pre-deposit of duty
2. Condonation of delay in filing the declaration for Modvat credit
3. Ex parte order and violation of principles of natural justice

Analysis:
1. The applicants/appellants sought dispensation with the pre-deposit of duty amounting to Rs. 2,67,681.00, which was denied to them as Modvat credit due to a failure to file a declaration for certain inputs. The Assistant Commissioner rejected their plea for condonation of delay in filing the declaration under Rule 57G(5) of the Central Excise Rules, stating that the request was made only after the show cause notice was issued. However, the Tribunal found this reasoning flawed as the rule does not specify that post-notice requests should be disregarded. The Commissioner (Appeals) also noted that since the appellants had already utilized the Modvat credit, the rule did not apply, as permission should have been sought before utilization.

2. The appellants contended that the original adjudicating authority's order was ex parte as their adjournment requests were denied, alleging a violation of natural justice. The Revenue argued that the appellants had multiple opportunities to present their case, which they did not utilize, justifying the ex parte proceedings. The Tribunal acknowledged the Revenue's stance but emphasized the importance of considering the appellants' arguments and requests, especially regarding the condonation of delay.

3. The Tribunal observed that the Assistant Commissioner should have considered the appellants' plea for condonation of delay despite being made post-notice. It criticized the narrow interpretation of Rule 57G(5) by the lower authorities, emphasizing that the rule should not be seen as requiring prior permission for credit already taken. The Tribunal highlighted that such strict interpretation would lead to redundant transactions. Additionally, it noted the lack of discussion on the appellants' claim that the inputs were covered by a broader description in their earlier declaration. Consequently, the Tribunal remanded the matter to the Assistant Commissioner for a fresh decision, setting aside the pre-deposit condition and allowing the appeal by way of remand.