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TMI Blog2008 (5) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... cise, Mumbai-IV. 2. The Commissioner, vide the impugned order, has confirmed the demand of duty of Rs. 35,17,492.63 raised vide show cause notice dated 31-3-95 for the period from 1-4-90 to 28-2-95 under Section 11A of the Central Excise Act, 1944 read with Rule 9(2) of the Central Excise Rules, 1944. She also confirmed the Central Excise duty aggregating to Rs. 22,99,480.97 under Section 11A of the Central Excise Act, 1944 demanded under five show cause notices dated 21-8-97, 3-10-97, 4-11-97, 1-4-98 and 21-9-98 for the period from 1-3-95 to 1-4-98. She also demanded interest under Section 11AB of the Central Excise Act, 1944 in relation to the demand of Rs. 35,17,492.63 confirmed vide show cause notice dated 31-3-95. She imposed a penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 6-6-88, which they sent to the Collector (as he was then known) seeking permission to send semi-finished wax crayon and oil pastels for hand labelling to job workers under Rule 56B of the Central Excise Rules, 1944 and the reply of the Department dated 12-8-88 that such permission is not required as the final product wax crayon were exempted from duty under Notf. No. 163/86. We find that the permission was sought by the appellants in respect of wax crayon and oil pastels and not for Crayplas compound. Therefore, their letter dated 6-6-88 cannot be of any help to them. 7. The appellants have relied on the following case laws in support of their claim that the extended period of five years is not invocable in regard to the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on 4-4-94 declaring Crayplas Compound as non-excisable. Hence, there is no suppression of facts on their part after 4-4-1994. Since the show cause notice was issued on 31-3-95, we hold that the demand of duty for the period from 4-4-94 to 30-9-94 is barred by limitation and for the period from 1-10-94 to 28-2-95 is within time, being within a period of six months and hence sustainable. 8. Regarding the eligibility of Modvat credit in case of demand of Rs. 35,17,492.63, the Commissioner has observed that wilful misdeclaration and suppression of facts with intent to evade duty on part of the appellants has been established. The Commissioner further observed that Rule 57E of Central Excise Rules, 1944 and Rule 57AE of the said Rules durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken immediately on receipt of inputs in the factory of the manufacturer. We hold that these arguments of the Commissioner are not tenable. It has been held by several judicial fora that if the assessee has not availed Modvat credit on inputs used in the manufacture of final products on the ground that the final products are exempt from duty and if subsequently it is held by the Department that the said final product is chargeable to duty the assessee should be allowed to avail Modvat credit on the inputs used in the manufacture of such final products, notwithstanding the fact that he has not complied with the statutory provisions of Modvat Scheme at the time of receipt of such inputs. In the light of the settled legal position, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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