2000 (11) TMI 478 - AT - Central Excise

Summary

Issues:
Disallowance of Modvat credit for not filing proper declarations and the acceptance of declarations sent by certificate of posting.

Issue 1: Disallowance of Modvat credit for not filing proper declarations

The appeal was filed against the order confirming the disallowance of Modvat credit due to the failure of the appellants to file proper declarations. The Commissioner (Appeals) upheld the disallowance stating that the appellants availed Modvat credit without submitting the required declarations. The main contention was whether the appellants' claim of sending declarations by certificate of posting could be accepted, especially when they did not obtain a dated acknowledgement from the Asstt. Commissioner as required by the rules. The department argued that failure to file declarations and obtain acknowledgments was sufficient grounds to deny Modvat credit, emphasizing the mandatory nature of Rule 57G. However, the appellants argued that they had been filing declarations regularly, maintained necessary records, and rectified any discrepancies pointed out by the department. They contended that the previous declarations should suffice, as there was no change in the manufacturing process, and the department had accepted their RT 12 returns and classification list. The Tribunal referred to previous judgments where it was held that failure to file subsequent declarations should not be viewed strictly if initial declarations had been accepted and acted upon by the department. The Tribunal, in this case, found that the previous declarations and assessments made for earlier periods should be considered valid for the period in question, thereby allowing the appeal and granting consequential relief.

Issue 2: Acceptance of declarations sent by certificate of posting

The central question revolved around whether the declarations sent by certificate of posting could be deemed acceptable under the Modvat rules. The appellants argued that they sent the declarations by post in good faith, as there was no specific rule prohibiting such a method. They maintained that there was no intent to defraud revenue, as they had consistently filed declarations and followed the Modvat procedures. The department contended that the failure to submit declarations in person and obtain acknowledgments was a sufficient ground to deny Modvat credit, citing the mandatory requirement under Rule 57G. However, the Tribunal, considering the circumstances and previous judgments, held that the previous declarations, along with the accepted RT 12 returns and other assessments, should be deemed valid for the period in question. The Tribunal emphasized that there was no change in the manufacturing process, and the department had not raised any issues regarding the declarations until later. Ultimately, following the precedent set by earlier judgments, the Tribunal set aside the impugned order and allowed the appeal, granting relief to the appellants.

This detailed analysis of the legal judgment highlights the key issues of disallowance of Modvat credit and the acceptance of declarations sent by certificate of posting. The Tribunal's decision was based on the consistency of the appellants' filings, the lack of change in the manufacturing process, and the precedent set by previous judgments in similar cases.