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2013 (10) TMI 349 - AT - Central ExciseSSI Exemption under Notification No. 8/1998 MODVAT Facility under Rule 57H of the erstwhile Central Excise Rules for export clearances under Rule 12(1)(a) of the Rules Held that - Other condition for availing the credit under Rule 57 H is that input credit should be verifiable with duty paying documents and invoices - Commissioner (Appeal) in the order has observed that the appellants have entered in raw material register showing the inputs as steel from April 98 to 28.10 98 whereas invoices available in the file show the description of inputs as Alloy Bars-85x7mm, Alloy Bars-110x9mm, Alloy Bars-65x6mm - Commissioner (Appeal) has observed that closing balance as on 28.10.1998 is 228.543 M.T. and it nowhere indicates that material is same for which invoices are produced for claiming the credit under Rule 57H as no break up for various type of alloy with their sizes has been indicated - The Commissioner held that basic requirement of Rule 57H has not been fulfilled - I do not find any infirmity in this finding of the Commissioner as he has made this observation after seeing the invoices and records Decided against Assessee.
Issues involved:
1. Availing modvat credit under Rule 57H of the Central Excise Rules for export clearances. 2. Allegation of inadmissible credit and penalty imposition by the Department. 3. Challenge against Order-In-Original before Commissioner (Appeal). 4. Interpretation of Rule 57H regarding transitional provisions for availing credit. 5. Requirement of maintaining separate accounts for inputs under Rule 57H. 6. Verification of input credit with duty paying documents and invoices. 7. Denial of credit for inputs not falling under the category of immediate receipt before the declaration. Analysis: 1. The case involves M/s Talbaru Forgings appealing against an Order-In-Appeal regarding the availing of modvat credit under Rule 57H for export clearances. The Department alleged that the appellants wrongly claimed credit without maintaining separate accounts for inputs, leading to a Show Cause Notice for recovery, interest, and penalty. The Assistant Commissioner's Order-In-Original was challenged before the Commissioner (Appeal), who rejected the appeal, prompting the current appeal. 2. The Tribunal examined Rule 57H, which deals with transitional provisions for availing credit. The rule requires a manufacturer to file a declaration with the jurisdictional Assistant Commissioner to claim credit on inputs received before obtaining acknowledgment of the declaration. The appellants claimed credit for inputs in stock on the date of filing the declaration. The Tribunal noted that Rule 57H does not mandate the maintenance of accounts but focuses on verifying physically existing stock at the time of the declaration. 3. The Tribunal addressed the ambiguity of the term "immediately before" in Rule 57H, emphasizing that inputs received before October, the filing date of the declaration, would not qualify for credit under the rule. The requirement for verifiable credit with duty paying documents and invoices was stressed, with the Commissioner (Appeal) finding discrepancies in the appellants' records regarding the nature of inputs claimed for credit under Rule 57H. 4. The Commissioner (Appeal) also upheld the denial of credit amounting to Rs. 33,197, as those inputs did not fall under the category of immediate receipt before the filing of the declaration. Ultimately, the Tribunal found no merit in the appeal and rejected it based on the non-fulfillment of Rule 57H requirements and discrepancies in maintaining records for availing modvat credit for export clearances. This detailed analysis highlights the key legal interpretations and findings of the Tribunal regarding the issues raised in the judgment.
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