9911796707
TMI Blog1994 (10) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant rules. The brief facts of the case are that on the basis of information gathered, the Central Excise Preventive Officers visited the factory premises of the appellants who are manufacturers of auto parts and accessories. They were found to be availing Modvat credit in respect of copper wires and chemicals (nickel sulphate, nickel chloride, boric acid and chromic acid etc.) without actually bringing the same into the factory and without utilising the same for manufacture of their finished product inside the factory. It was also observed that there was no facility for electroplating the goods. Statement of Sudhir Pahuja, Manager was recorded in which he stated that the appellants were getting electroplating of the copper wire and che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed penalty. Hence, this appeal. 2. Smt. Archana Wadhwa, learned Counsel for the appellants referring to the statement of the Manager, submits that it has been retracted immediately and, therefore, no weightage can be attached thereto. She submits that the crux of the matter is whether Modvat credit can be denied solely on the ground of non-observance of procedural requirement of Rule 57F(2), if otherwise eligible and in this connection she draws our attention to the show cause notice and the order which proceed on the basis that the appellants are not eligible to Modvat solely for this reason. The show cause notice itself indicates that the appellants had been maintaining all registers such as RG 23A Part I and duty paying documents. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, if any, came to an end on 4-8-1987, i.e. the date when the officers visited the appellants factory and hence the show cause notice should have been issued within 6 months from that date. She, therefore, prays for setting aside of the duty demand and penalty. 3. Learned DR, Shri Satish Shah contends that the Collector has rightly relied upon the statement of the appellants Manager which cannot be said to have been retracted as the letter dated 5-8-1987 to the Chairman, CBEC has been issued by the authorised signatory of the appellants and is not a retraction by the Manager. The stand of the appellants that they had their own electroplating machine which they had purchased from Dynamic Electronics has been taken for the first time in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants that the inputs have been utilised for the finished end-product declared by them then it can be said that substantive compliance has been made for availing Modvat credit. In this view of the matter, we hold that the lower authorities should re-examine the issue to determine whether with reference to the records it can be verified that the inputs which was sent out have been received back after reprocessing and the inputs have been ultimately utilised in the end-product. Subject to such satisfaction, the benefit of Modvat credit should be extended to the appellants, notwithstanding their failure to apply and obtain necessary permission. In the facts and circumstances of the case, we set aside the impugned order and remand the matter t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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