TMI Blog1987 (8) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... the party would have given the declaration for opting out, they would have legally been entitled for exemption if any. The party had not given any declaration to the effect that they will not be availing MODVAT from 1-4-1986. Thereafter they have not taken any credit but utilised the balance for the first clearance from the factory after 1-4-1986. Thereafter they have not taken any credit but utilised the balance for the first clearances from the factory after 1-4-1986. i.e. on 6-4-1986. If they wanted to avail of the exemption, they would not have paid the duty. It is immaterial whether the duty is paid through PLA or through RG 23A. Since the intention of the party was to pay the duty from the beginning naturally, the intention of the party was to continue for MODVAT. To pay or to adjust the duty in RG 23A by mistake is an afterthought. The party took a long time to adjust the RG 23A amount. This proves that the intention of the party was to pay duty and avail MODVAT. Any Law (Anyway) the party has not produced any documents to prove their intention for not availing MODVAT before the date of first clearance. Once the party opt for MODVAT, they have to continue it for, throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly approved by the Asstt. Collector on 30-5-1986. The finding of the learned Asstt. Collector is liable to be quashed on the ground of law as well as facts, (ii) Regarding the second finding of the id. Asstt. Collector, the appellants submit with respect that there is no provision in the relevant Notification No. 175/86 that, once an assessee has opted for MODVAT credit in a financial year, he cannot be out of it subsequently and avail full exemption of duty, even if he has paid back the full credit that he has utilised during the year as in the instant ease. A dose perusal of the clause (a) of the Notification No.175/86 will show that, in the same financial year, an assessee cannot have the benefit of MODVAT credit and full exemption simultaneously. In the instant case, the appellants have paid back the credit utilized by them and therefore they are clearly entitled to the full exemption. The findings of the id. Assistant Collector without the authority of law and liable to be quashed on this ground alone. 4. Moreover, the case of the appellants is fully governed by the clarification issued by the learned Board that an assessee can opt out of the MODVAT scheme subject of cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. On the other hand, they had availed of the exemption after making the necessary declaration in the classification list (Exhibit No.6) which was duly approved by the learned Asstt. Collector; and further, making the declaration regarding exemption in the appropriate R.T. 12 returns for the months of April, May and June duly accompanied by nil duty G.P.I gate passes, the appellants produced copies of the R.T. 12 returns. This showed that they had availed of the exemption with the full knowledge and approval of the Department. In the circumstances, the question of mala fides was clearly ruled out and, therefore, no penalty was imposable. In this connection, the appellants read out the relevant para (b.8) on page 10 of their memo of appeal. The appellants, therefore, prayed that the order of the learned Asstt. Collector should be set aside on grounds of facts and law as pleaded by them in their written memo of appeal and in the course of personal hearing. To summarise : (i) the appellants deny that they had opted for MODVAT Credit during the year 1986-87. On the other hand, they had opted for full exemption in their classification lists w.e.f. 2-4-1987 (Exhibit 6). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. On careful consideration of all sides of the case, including the submissions made during personal hearing and on perusal of the exhibits attached to the appeal, I am of the view that the findings recorded by the Asstt. Collector are not sustainable either in respect of the demand for Rs.2,89,697.27 or in respect of personal penalty. I have seen the R.T. 12 returns for April 1986, which clearly bears the following remark, availing exemption vide Notification No.216/86 C.E. dated 2-4-1986". The R.T. 12 for May 1986 reads as follows, Fully exempted from duty upto Rs. 15 lakhs as per Notification No. 216/86 C.E. dated 2-4-1986". Similar remarks are borne in the returns for the subsequent months. Similar declarations had also been made in the classification list filed by the appellants in the Central Excise Office. It is not in dispute that these documents were filed in time or that they were not approved by the competent authority. The intention of the appellants to avail of the exemption is clearly established by the aforesaid documents. Now the question to be decided is to whether the appellants would become disentitled to the exemption under Notification No.175/86 as amended ..... X X X X Extracts X X X X X X X X Extracts X X X X
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