2000 (10) TMI 694 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit under Rule 57G, Admissibility of Modvat credit under Rule 57H

In this case, the Assistant Commissioner disallowed the Modvat credit amounting to Rs. 2,88,234/- to the appellants as it was taken after six months from the date of issue of invoices, which was considered irregular under Rule 57G. On appeal, the Commissioner (Appeals) upheld the decision, noting that the Modvat declaration was filed after taking the credit, contrary to the procedure. The appellants argued that the credit was taken on inputs used for fabrication of storage tanks, and they had intimated the Department about transferring the credit to the main account. However, it was found that the separate Modvat register was not submitted with the monthly returns as required by the rules. The Tribunal observed that the credit was indeed taken after the six-month period, and the separate register did not contain all necessary entries. The authorities were not empowered to condone the delay in taking the credit. Despite a mention of Rule 57H in the show cause notice, no findings were recorded on the eligibility of the appellants for Modvat credit under this rule.

The Tribunal held that the claim for Modvat credit under Rule 57G(2) was not tenable and rejected it. The matter was remanded to the Deputy/Assistant Commissioner to examine the admissibility of the credit under Rule 57H and provide the appellants with a reasonable opportunity to present their case. The decision disposed of the appeal in these terms, emphasizing the need for a thorough examination of the eligibility for Modvat credit under Rule 57H.