2001 (7) TMI 546 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit and imposition of penalty by the Assistant Commissioner.
2. Upholding of the Assistant Commissioner's order by the Commissioner (Appeals).
3. Eligibility of Modvat credit under specific invoices.
4. Filing of declaration and application for condonation of delay for Modvat credit.

Issue 1: Disallowance of Modvat credit and penalty imposition
The Assistant Commissioner disallowed Modvat credit of Rs. 53,092/- and imposed a penalty of Rs. 5,000/- on the appellants. The Commissioner (Appeals) upheld this decision, leading to the appeal.

Issue 2: Upholding of the Assistant Commissioner's order
The Commissioner (Appeals) upheld the Assistant Commissioner's order disallowing Modvat credit and imposing a penalty, prompting the appeal by the appellants.

Issue 3: Eligibility of Modvat credit under specific invoices
The appellants argued that their case for Modvat credit under a specific invoice was covered by relevant legal decisions and clauses, making them eligible for the credit. The Department, however, pointed out specific findings in the Order-in-Appeal to counter the appellants' claims.

Issue 4: Filing of declaration and application for condonation of delay
Regarding the filing of declaration and application for condonation of delay for Modvat credit, the appellants contended that the declaration was filed before taking credit, and the Department's silence implied acceptance. The Department argued that the mandatory requirement of filing an application for condonation of delay was not fulfilled, justifying the denial of Modvat credit.

In the judgment, the Tribunal examined the timeline of events, noting that the credit was taken after filing the declaration. It emphasized that the silence of the Department indicated acceptance of the declaration. The Tribunal highlighted the circulars by the Board, stating that technical lapses should not hinder Modvat credit if goods were received and duty paid. Consequently, the Tribunal ruled in favor of the appellants, allowing Modvat credit for goods covered by a specific invoice dated 23-3-1996. However, the Tribunal upheld the position regarding the debit of Rs. 7,597/- as stated in the impugned order. The appeal was partly allowed with appropriate consequential actions.