1998 (4) TMI 247 - AT - Central Excise

Summary

Issues:
1. Grant of Modvat credit under Rule 57H for inputs in stock and in process as on a specific date.
2. Verification of correctness of inputs and finished stock containing inputs declared by the respondents.
3. Denial of Modvat credit due to delayed submission of a statement of inputs.
4. Admissibility of Modvat credit under Rule 57H.
5. Appeal against the decision of the lower appellate authority.

Issue 1: Grant of Modvat credit under Rule 57H
The case involved the grant of Modvat credit under Rule 57H for inputs in stock and in process as on a specific date. The respondents had claimed Modvat credit in their declaration but did not provide detailed information about the inputs. The original authority did not allow the benefit of Modvat credit under Rule 57H, citing a delay in submitting a statement of inputs. However, the lower appellate authority accepted the appeal, stating that the credit was legally available subject to verification. The Tribunal observed that the respondents had submitted a statement in August 1987, which was verified by the Range Supdt., and dismissed the Revenue's appeal, confirming the Modvat credit.

Issue 2: Verification of correctness of inputs
The original authority questioned the correctness of the inputs and finished stock declared by the respondents, stating that there was no verification of the details with relevant documents. However, an endorsement by the Supdt. on a statement indicated some verification had been done. The Tribunal found that the subsequent statements provided by the respondents were variations of the original statement, with markings by the Supdt. showing checks made. The Tribunal concluded that the records maintained by the respondents, which were not challenged, should not be ignored, leading to the dismissal of the Revenue's appeal.

Issue 3: Denial of Modvat credit due to delayed submission
The original authority denied Modvat credit under Rule 57H due to the delayed submission of a statement of inputs, which was received 17 months after the declaration. The Tribunal noted that the Department had been denying the opportunity to verify the particulars in the statement, leading to the denial of the credit. However, the lower appellate authority found the credit admissible subject to verification, which was upheld by the Tribunal.

Issue 4: Admissibility of Modvat credit under Rule 57H
The case revolved around the admissibility of Modvat credit under Rule 57H. The respondents sought the benefit of this credit for inputs in stock and in process as on a specific date. The lower appellate authority held that the credit was legally available, subject to verification, and the Tribunal concurred with this decision, dismissing the Revenue's appeal and confirming the credit for the respondents.

Issue 5: Appeal against the decision of the lower appellate authority
The appeal before the Tribunal stemmed from the decision of the lower appellate authority, which had accepted the appeal of the respondents regarding the Modvat credit. The Tribunal carefully considered the arguments presented by both sides and found in favor of the respondents, dismissing the Revenue's appeal and confirming the order-in-appeal that granted the Modvat credit to the respondents.