1990 (8) TMI 283 - AT - Central Excise

Modvat - Credit taken before obtaining Assistant Collector s acknowledgement of the declaration

Summary

Issues:
Challenge to disallowance of credit for SKD Kits of electronic type writers due to countervailing duty. Interpretation of Rule 57G and Rule 57H of the Central Excise Rules, 1944. Applicability of amended Rule 57H from 1-3-1987.

Analysis:

The appeal before the Appellate Tribunal challenged the order disallowing the credit taken by the appellant for SKD Kits of electronic type writers that had suffered countervailing duty. The appellant contended that they had followed the necessary procedures under Rule 57G of the Central Excise Rules, 1944, by submitting a declaration and taking credit in their R.G. 23A Part I. The Department objected, stating the credit was taken before the declaration was officially received. The appellant argued that despite the duty-paid inputs being in stock and unused, they were entitled to credit under the amended Rule 57H effective from 1-3-1987. This argument was not considered in the impugned order by the lower appellate authority.

The Tribunal considered the submissions and noted that the duty on the inputs was undisputed. Rule 57G required manufacturers to file a declaration before taking credit on duty-paid inputs. The appellant had taken credit before the declaration was officially received, as per records. However, the Tribunal highlighted the amended Rule 57H, which allowed credit for duty-paid inputs in stock as of 1-3-1987. The appellant's inputs were verified to be in stock on 22-5-1986. As the lower authority did not consider the applicability of amended Rule 57H despite a specific plea, the Tribunal decided to remand the matter for fresh consideration. The Tribunal set aside the impugned order and directed the original authority to re-examine the issue in light of the amended Rule 57H.

In conclusion, the Tribunal's judgment focused on the procedural aspects of taking credit for duty-paid inputs under Rule 57G and the applicability of the amended Rule 57H from 1-3-1987. The decision emphasized the need for a thorough reconsideration of the matter by the original authority to determine the appellant's entitlement to credit based on the specific circumstances and the amended rule's provisions.