1998 (9) TMI 199 - AT - Central Excise

Summary

Issues:
1. Barred by time demands under Rule 57-I of C.E. Rules.
2. Applicability of Rule 57H in availing Modvat credit for new inputs.

Analysis:
1. The appeal challenged the Order-in-Appeal confirming the rejection of applications seeking Modvat credit for fresh inputs. The demands were raised under Rule 57-I of C.E. Rules for the period from 8-4-1988 to 11-12-1992. The appellants argued that the demands were time-barred, as no allegation of suppression or mis-declaration was made, and the proviso to Rule 11(1) was not invoked. They contended that demands under Rule 57-I should be limited to six months. The authorities rejected their plea, stating that Rule 57H, a transitional provision, did not apply to new inputs. The Tribunal found merit in the appellants' arguments, noting that the show cause notice lacked grounds for extending the period beyond six months and was not conducted by the Commissioner as required. The Tribunal held that the rejection of 57H applications was unjustified, as simultaneous filings under Rule 57H and 57G were permissible, and technicalities should not deny Modvat credit.

2. The Tribunal examined the applicability of Rule 57H in availing Modvat credit for new inputs. Rule 57H allows manufacturers to declare inputs received before obtaining acknowledgment under Rule 57G to avail of credit. The appellants argued that they filed declarations under both rules simultaneously due to uncertainty about required inputs. The Tribunal agreed, stating that Rule 57H was not time-restricted and could be invoked when necessary. It found no irregularity in the appellants' actions and emphasized that technicalities should not hinder Modvat credit entitlement. Consequently, the Tribunal set aside the impugned order and allowed the appeal, affirming the validity of availing Modvat credit for new inputs through Rule 57H alongside Rule 57G declarations.