1999 (6) TMI 193 - AT - Central Excise

Summary

Issues:
Appeal against denial of Modvat credit on duty paid for D.G. sets due to dispute on liability to pay duty. Interpretation of Rule 57T regarding filing declaration, paying duty, and seeking permission for Modvat credit.

Analysis:
The appeal arose from Order-in-Appeal upholding the denial of Modvat credit on D.G. sets. The dispute revolved around the liability to pay duty on these sets. The Commissioner held that the declaration should have been filed before installation, rejecting post-facto permission for Modvat credit under Rule 57T.

The advocate argued that Rule 57T applies after determining duty liability on the item as capital goods, which was disputed in this case. He cited precedents where Modvat credit was granted despite procedural issues. The revenue contended that duty liability arises on machinery installation, not duty payment date, precluding credit after a year.

Upon review, the Tribunal found Rule 57T mandates filing a declaration after resolving disputes on duty liability for capital goods. The appellants filed after dispute resolution and paid duty promptly, meeting Rule requirements. The Tribunal criticized the revenue's illogical interpretation and emphasized that filing declarations during disputes is unnecessary. Precedents supported granting credit despite procedural lapses.

Ultimately, the Tribunal ruled in favor of the appellants, allowing Modvat credit on duty paid for capital goods. It highlighted the absence of Rule 57T violation and the appellants' entitlement to the credit. The appeal was allowed, overturning the previous decision.