2000 (7) TMI 687 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit due to failure to file a proper declaration under Rule 57G; Barred by limitation show cause notice issuance.

Issue 1: Disallowance of Modvat credit due to failure to file a proper declaration under Rule 57G:
The appellants claimed Modvat credit of Rs. 53,583.00, disallowed on the grounds of not filing a proper declaration under Rule 57G. The appellants received imported components, paid additional Customs duty, and informed Central Excise authorities of their intention to avail Modvat credit. Despite a separate declaration prepared under Rule 57G, it was inadvertently not filed. The appellants took credit in RG-23A Part-II, with records annexed to RT-12 returns. A show cause notice in 1993 alleged irregular credit availment without the proper declaration, leading to denial of credit and a penalty. The original adjudicating authority and Commissioner (Appeals) upheld the denial. The advocate argued that the July 22nd, 1991 letter informed about credit intention, emphasizing no prescribed format for the declaration under Rule 57G. The Revenue contended that filing a declaration is a procedural requirement before credit can be taken. The advocate later mentioned the subsequent filing of the declaration on 6-8-1991. The judgment cited previous cases where non-declaration in the prescribed format was considered a technical error, emphasizing clear intention communication to the department. The endorsement on the bill of entry declaring credit intention was deemed sufficient compliance with Rule 57G, leading to the appellants' success on this ground.

Issue 2: Barred by limitation show cause notice issuance:
The show cause notice issued in 1993 was challenged as barred by limitation. The notice was based on the scrutiny of statutory documents without alleging late submission. The judgment found that any discrepancies should have prompted a notice within six months from document filing. Issuing the notice in 1993, after two years, was deemed untimely. Citing a similar case precedent, it was held that the extended period of limitation is not available for raising duty demands. Consequently, the appellants succeeded on the limitation point as well. The impugned order was set aside, the appeal allowed, and consequential relief granted to the appellants, leading to the disposal of the stay petition.