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TMI Blog2005 (3) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 T that the said capital goods had been received on 2-12-1996 and 25-11-1996, respectively. Thus it was detected that the declarations were filed beyond the period of three months (prescribed under Rule 57T) from the dates of receipt of the capital goods. The party requested for condonation of this delay, which was allowed by the Assistant Commissioner. There upon, the assessee took Modvat credit on the capital goods. However, they reversed thus credit later on when confronted by Audit objection. Subsequently a show-cause notice was issued by the department on 28-2-2001 proposing to disallow the above credit (Rs. 9,68,200/-) and imposed a penalty. These proposals were upheld by the original authority which ordered recovery of Rs. 9,68,200/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Assistant Commissioner s order of condonation of delay of declaration. In this connection, ld. DR relies on the Supreme Court s judgment in the case of U.O.I. v. Jain Shudh Vanaspati Ltd. [1996 (86) E.L.T. 460 (S.C.)], wherein it was held that, without the order of clearance under Section 47 of the Customs Act being revised under Section 130 of the Act, the importer of the goods could be called upon to pay short-paid duty under Section 28 of the Act where it was found that clearance of the goods was obtained fraudulently. The DR submits that the Apex Court s ruling in the customs case of Jain Shudh Vanaspati Limited was followed by the Court in a Central Excise case vide CCE, Bhubaneshwar v. Re-rolling Mills [1997 (94) E.L.T. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee could offer any cogent explanation for the delay of their declarations. It is stated that the capital goods purchased by them were kept in the premises of their transporters till the goods were physically received in their factory. They, however, could not show that they had the requisite permission from the department for keeping the goods outside their factory. On a perusal of the records, it appears to me that the appellants have failed to offer valid explanation for the delay of the Modvat declarations in question. It is in this background that the relevant finding of the lower appellate authority has to be examined. That authority found that the appellants had wilfully misdeclared the dates of receipt of the capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance of goods, under Section 130 of the Act. The Apex Court held as under:- 6. The case of the appellants in the show cause notices is that the stainless steel containers in which the said oil was imported were banned, that the stainless steel containers were deliberately camouflaged by painting them to resemble mild steel containers, and that this was done with a view to enabling their clearance. A clearance order under Section 47 obtained by fraudulent means such as this (if it, in fact, be so) cannot debar the issuance of a show-cause notice for confiscation of goods under Section 124. Fraud, if established, unravels all. An order under Section 47 obtained by the employment of fraudulent methods does not have to be set aside by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of delay was not appealable. Such an order resulting in civil consequence for the Revenue was certainly a quasi judicial order which could be appealed against. True, the department did not choose to prefer appeal against it. Now the question arises whether, without appealing against the Assistant Commissioner s order of condonation of delay of Modvat declaration, it was open to the department to recover the Modvat credit in question from the assessee on the ground that there was no valid declaration in respect of the capital goods. This question, in my view, would certainly attract the ruling of the Apex Court in Jain Shudh Vanaspati Ltd. (supra) inasmuch as the appellants secured condonation of delay of Modvat declarations in a fraudul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the substantive conditions for Modvat credit stood satisfied. The instant case is not one of deficiency of particulars of capital goods in Modvat declaration. It is one of want of declaration. It is in this manner that ld. Commissioner (Appeals) has distinguished Kamakhya Steels (supra). I do not find anything wrong with this. Moreover, in terms of the Supreme Court s ruling in the case of Jain Shudh Vanaspati Ltd. (supra), the benefit of Kamakhya Steels (supra) would not, even otherwise, be available to the appellants who disentitled themselves to such benefit by means of fraud. 7.The Modvat credit was reversed prior to show-cause notice. Ld. Counsel has argued that, in such a situation, penalty was not liable to be imposed on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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