2002 (1) TMI 419 - AT - Central Excise

Summary

Issues:
- Denial of Modvat credit on Brass Gutka
- Imposition of penalty under Rule 57-I(4) of the Central Excise Rules, 1944

Denial of Modvat credit on Brass Gutka:
The appeal challenged the Commissioner (Appeals)'s decision denying Modvat credit of Rs. 4,985 on Brass Gutka for the period July to September, 1996. The appellant argued that the item fell under the description "Brass parts" in the declaration filed earlier. The denial of credit was based on the ground that the inputs were not correctly declared under Rule 57G. The appellant contended that the denial was unjustified as they had voluntarily disclosed all material facts to the Department. Reference was made to a decision by the Tribunal's Larger Bench in a previous case, which supported the appellant's position. The Tribunal noted that the appellant had declared the input as "brass parts" in the earlier declaration, and the credit was taken subsequently. Citing a Notification amending Rule 57G, the Tribunal held that Modvat credit should not be denied even if the declaration did not contain all required details. Therefore, the denial of Modvat credit on Brass Gutka was deemed unsustainable, and the decision of the lower appellate authority was set aside, allowing the appeal.

Imposition of penalty under Rule 57-I(4) of the Central Excise Rules, 1944:
The appellant also challenged the penalty of Rs. 2,500 imposed under Rule 57-I(4) of the Central Excise Rules, 1944. The appellant argued that there was no justifiable ground for the penalty as they had disclosed all material facts by filing returns and documents. The Tribunal did not specifically address the penalty issue in the detailed analysis provided. However, since the appeal was allowed, it can be inferred that the penalty imposed was likely set aside along with the denial of Modvat credit on Brass Gutka.