Monthly Modvat Meeting held at Pune on 23-6-1989 Point No. 5 regarding allowance of Modvat credit for past receipts where the demands are raised and confirmed at much later dates - Regarding - Central Excise - 34/89

Monthly Modvat Meeting held at Pune on 23-6-1989 Point No. 5 regarding allowance of Modvat credit for past receipts where the demands are raised and confirmed at much later dates - Regarding Circular No. 34/89 Dated 16-8-1989 [From F. No. 263/42/89-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Monthly Modvat Meeting held at Pune on 23-6-1989 Point No. 5 regarding allowance of Modvat credit for past receipts where the demands are raised and confirmed at much later dates - Regarding I am directed to invite your attention to the minutes on Point No. 5 of the monthly Modvat meeting held at Pune on 23-6-1989, on the above subject. It has been represented that in cases where an assessee and the Department are genuinely under the impression that their final products are chargeable to nil rate of duty and the assessee neither files a Modvat declaration in respect of the inputs used in the manufacture of such final products nor follows other Modvat procedures, should be permitted to take credit on the basis of consumption of inputs used in the manufacture of final products on which the Department subsequently raises demands and confirms the same. It had been contended that it would be unjust to deny credit in such cases merely because the assessee could not fulfil procedural requirements. The matter has been examined by the Board. Credit of Modvat can be availed only after filing declaration under Rule 57G. When the party genuinely believes that their product is chargeable to nil rate of duty, they should get approval of such a rate by filing classification list. If Department contests assessee's claim, then they can stake their claim for Modvat credit by resorting to provisional assessment. Modvat credit in such cases can be availed towards payment of duty provisionally assessed. The credits so availed can be adjusted on finalisation of provisional assessments by taking recourse to provisions under Rule 57E, if necessary. The above instructions may be brought to the notice of the field formations. Trade interests may also be suitably informed. Receipt of this letter may kindly, be acknowledged.