TMI Blog2008 (8) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Gupta and Kishan Swaroop Chaudhari, JJ. Shri Ramit Mehta, for the Petitioner. S/Shri Rishabh Sancheti for V.K. Mathur, for the Respondent. [Judgment per: N.P. Gupta, J.]. - This appeal by the assessee seeks to challenge the order of the Tribunal dated 4-7-2005, allowing the appeal of the Revenue, and setting aside the order of the Commissioner (Appeals), who in turn had set aside the order-in-original, whereby (by order-in-original), the Assistant Commissioner had disallowed the Modvat credit of Rs. 5,37,799/-, and confirmed the recovery thereof, and also imposed a penalty of Rs. 50,000/- under Rule 173Q(1)(bb) of the Central Excise Rules, 1944. The appeal was admitted on 7-4-2006, by framing the following substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged, that the assessee vide AR4s dated 4-8-1998, 17-8-1998 and 22-8-1998 had exported certain quantity of fabrics in his own account, and in the said AR4s had given declaration, that the assessee have manufactured the fabric as mentioned in AR4, and that the benefit of Modvat under Rule 57A has not been availed, and have not availed the facilities under Rules 12(1)(b) and 13(1)(b), and that export is discharge of export obligation under advance licence file, which was a false declaration, as the assessee has been availing Modvat credit on the inputs under Rule 57A. Likewise, in column 4, the assessee had further declared, that the export is under duty drawback, while on examination of Central excise records and R.T.12 return of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration, and about ineligibility of the assessee to avail Modvat credit under Rule 57A on the goods, which are exported. Then it is submitted, that may be that subsequently the assessee availed the drawback on the replenished imports, which are imported on the CVD, and such availment of drawback may be a wrong availing of the draw back, but then, for that purpose, the department could have taken proceedings under the drawback rules, being Customs and Central Excise Duties Draw Back Rule, 1971, that admittedly has not been done. In that view of the matter, the issue could not be mixed up by the department, to deny the Modvat credit to the assessee, and to order recovery thereof. 5. The learned counsel for the Revenue, on the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have considered the submissions, and have also gone through the impugned orders, the provisions of the Act, and the Rules. 7. The present one is a typical case, where, by resorting to subterfuge, and impermissible technicalities, the Modvat credit has been wrongly claimed by the assessee. This much is of course true, hyper technically, that as on the dates when the AR4s were submitted, and the goods were exported, the assessee had not claimed the Modvat credit on the inputs, and had not availed the facilities under Rules 12(1)(b) and 13(1)(b). But then, that is not the end of the matter. 8. This much is not in dispute, that if the goods were to be indigenously sold, and were to be sold without AR4, the goods were liable to levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im Modvat credit, in such circumstances, is clear from a bare reading of Rule 57A, sub-rules (1) and (2), which read as under :- "Rule 57A. Applicability.- (1) The provisions of this section shall apply to such finished excisable goods (hereafter, in this section, referred to as the final products) as the Central Government may, by notification in the Official Gazette, specify in this behalf for the purpose of allowing credit of any duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereafter, in this section, referred to as the specified duty) paid on the goods used in the manufacture of the said final products (hereafter, in this section, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Rule 57A, but then, the declaration was required to be considered in the right perspective, inasmuch as, the benefit of Modvat credit should not have been availed, not only at the precise point of time when the declaration is given, but the benefit should not have been availed with respect to the inputs used in manufacture of the finished products, which was sought to be exported under AR4. Obviously, not only at the cut off time of giving declaration AR4, but also at any time in future. In other words, the declaration is required, to the effect of having not availed the Modvat credit with respect to inputs used in manufacture of the finished products exported under the declaration, and cannot be confined to the precise poi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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