9911796707
TMI Blog1989 (3) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... crap utilised by them in the manufacture of their final product. He also imposed on the appellants under Rule 173Q a personal penalty of Rs. 5,000/-. 2. The appellants are mini steel plant manufacturing iron and steel products falling under Chapter 72 of the Central Excise Tariff Act, for which one of the raw materials is steel scrap, which is purchased by them from outside. They filed a declaration under Rule 57G of the Central Excise Rules for the purposes of availing MODVAT credit of inputs on 18-6-1986 and obtained a dated acknowledgement from the jurisdictional Assistant Collector on 19-6-1986. On 30-12-1986 officers of Anti-Evasion Headquarters, Central Excise Collectorate, Hyderabad, visited the appellant s factory. It was noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 57H, relating to transitional provisions, credit can also be availed on such inputs used in the manufacture of final products which are cleared from the factory on or after 1-3-1986. In any case, the learned Consultant pointed out that the credit of duty availed was on 30-6-1986 in their R.G. 23-A Pt.II, and on this a Show Cause Notice has been issued only on 30-12-1986, beyond six months period, and as such, it was time-barred since the Department, being in the know of their availing of the credit, cannot seek to recover duty which is beyond six months. The learned Consultant further pleaded that there was no justification at all for the imposition of a personal penalty on the appellants herein for the offence, as there was no mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s down that a manufacturer who has filed a declaration may, after obtaining a dated acknowledgement from the Assistant Collector, take credit of duty paid on the inputs received by him. The First Proviso to this Rule lays down that in certain circumstances the Central Government may direct that with effect from a specified date all stocks of certain inputs in the country with specified exceptions may be deemed to be duty-paid and credit of duty in respect of the said inputs may be allowed at a rate to be specified by the Government in a direction to be issued by the Government for the purposes under this Rule. There was one such direction issued by the Central Government in respect of steel scrap, fixing the credit of duty at the rate of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all prior to the permission granted under Rule 57G(2). In this case, the appellants filed the declaration for including steel scrap as an input only on 18-6-1986 and obtained a dated acknowledgement from the Assistant Collector on 19-6-1986. Therefore, the facility of availing of MODVAT credit on steel scrap as inputs became available to them on and from that date in terms of Rule 57G(2) after filing of the declaration as per Rule 57G(1). It then follows that even the deemed credit will be permissible to a manufacturer only after he has filed the declaration under Rule 57G(1). This is so because what is exempted by the direction of the Central Government dated 7-4-1986 specifying inter alia deemed credit in respect of steel scrap, is the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rne out by the material on record as the Show Cause Notice is seen to have been sent by Registered Post to the appellants within six months, and the demand for duty is being made under Rule 9(2) read with Section 11-A invoking the longer period on the ground of suppression, and the fact remains that the appellants had availed of deemed credit for the period prior to the date of declaration, on their own, which was only found out by the officers of the Department on the visit and scrutiny of the records. We are, however, in agreement with the appellants in their plea that, in any case, the penalty on the appellants on this score is not warranted, as the records do not reveal any mala fides on their part. The personal penalty on the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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