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TMI Blog2016 (4) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of the present excise reference is that the applicant M/s Global Sugar Ltd., as it was then known, had taken Modvat credit on structural materials such as channels, plates, angles, rounds, shapes and sections of mild steel which was used in the construction of shade and building of the factory and for staging structure of boiling houses. According to the Department, the applicant had wrongly taken Modvat credit amounting to Rs. 25,25,826.75 on the goods purchased by it without obtaining mandatory permission as provided under Rule 57-T(3) of the Central Excise Rules (hereinafter referred to as the Rules). Since the mandatory procedure was not followed the Modvat credit was disallowed by the Commissioner. The applicant filed an appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of a final product which is exempt from the whole of the duty of excise leviable thereon (other than a final product which is exempt for the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year) or is chargeable to nil rate of duty and also that he shall not claim depreciation under section 32 of the Income-tax Act, 1961 (43 of 1961), or as revenue expenditure under any other provision of the said Income-tax Act, in respect of that part of the value of capital goods which represents the amount of specified duty paid on such capital goods. (3) In case where a manufacturer was not in a position to make the declarations und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such capital goods could not be used exclusively for production of the final product which is exempted from the whole of the duty of excise leviable thereon. 5. Sub-section (3) of Rule 57-T of the Rules indicates that where a manufacturer could not seek a declaration, but subsequently files an application seeking a declaration, the same shall be considered by the Assistant Commissioner on sufficient cause being shown by the applicant for not filing the application within time. 6. The Commissioner while disallowing the Modvat credit and imposing a penalty held that no permission as provided under Rule 57T of the Rules had been granted by the Assistant Commissioner and therefore, the applicant had wrongly availed the Modvat credit. 7. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws relief to a manufacture on the duty element borne by him in respect of the inputs used by him. The object behind Rule 57-T of the Rules in the instant case is utilization of credit allowed towards such inputs which was being exclusively used for erection of a shed and was not exclusively used for production of a final product. Sub-clause (6) of Rule 57-T indicates as to when a Modvat credit could be availed, namely, that if the capital goods are received in the factory premises of the manufacturer under cover of a document specified under Rule 57-G evidencing the payment of duty on such capital goods. 10. In the instant case, it is not disputed that the goods were received in the factory premises and was consumed for the purpose of erec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any substantial right. In our opinion, the said decision is clearly applicable. 13. In the light of the aforesaid, we hold that Rule 57-T of the Rules is only procedural in nature. We are also of the opinion, that Modvat credit cannot be denied on a technical ground that the procedure for availing Modvat credit was not followed at the material moment of time. 14. In the light of the aforesaid, the question of law is answered in favour of the applicant. The Tribunal was not justified in interpreting Rule 57-T(3) of the Rules in a technical manner holding it to be a mandatory provision. Consequently, the question of law is answered accordingly, as a result of which, the order of Tribunal as well as the order of the Commissioner are set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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