1992 (5) TMI 135

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..... le to the Appellants and directing them to repay the same either by crediting the same in the PL Account with them or by depositing the same in cash, and also imposing penalty of Rs. 1,000/- under Rule 173Q(1)(bb) of the Central Excise Rules, 1944. 2. The appellants here are engaged in manufacturing of excisable goods falling within Chapters 85 and 90 of the Central Excise Tariff, and though they are the small scale units, they did not avail the benefit of Notification 175/86 during the financial year 1989-90, but chose to avail of Modvat Credit. In the course of their manufacturing activity, during the said period, the appellants purchased certain inputs from a manufacturer who also being a small scale unit, availed the benefit of Notifi .....

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..... cannot be taken away merely on account of not availing such credit at the time of receipt of the inputs, unless the same, is barred by limitation, and has further observed that such a credit is taken within a reasonable time. The Collector (Appeals) however held that reasonable time was not defined in the said decision, and in his opinion, higher notional credit, is not taken at the time of receipt of input, or at the end of the month, or in any case before the 5th day of the next month, when RT-12 Returns have to be filed, the same was not available. 3. Mr. Rajhans, the Ld. Consultant has pleaded that Rule 57B does not specify as to at what point of time the credit should be taken, and that as soon as the appellants became aware of the .....

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..... th it the criteria of subjective satisfaction, and no specific time limit can be held as Reasonable time , considering various other provisions of the Excise Act and Rules framed thereunder, as also allied Tax Legislation, period of six months, has been considered as reasonable. Here the credit is availed of within the period of six months from the date of eligibility for the same, and as such, the same cannot be denied merely because the same is not taken when the inputs were received, or at the time of filing of RT-12 Return. 6. The approach of the authorities below therefore, does not appear to be in conformity with the Rule position, and hence cannot be sustained. The appellants have to be permitted to avail of such higher notional c .....

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