TMI Blog2005 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in making of declaration or furnishing incomplete particulars should not come in the way of assessee in availing MODVAT benefit is clear intent of insertion of sub-rule 13 with effect from 9-2-99. Our above conclusion is also fortified with the contemporaneous circular issued by the Central Board of Excise Customs which clearly says that merely procedural lapses be not allowed to defeat the modvat credit benefit, if substantive conditions about payment of Duty and user of goods in manufacture of end product in factory are fulfilled. In the present case as per finding reached there is no complaint that assessee manufacturer has not satisfied the said substantive conditions for availing the MODVAT credit but only lapse alleged is filing of delayed declaration. Thus, conclusion reached by the Tribunal with aid of sub-rule (13) of Rule 57-T that this lapse cannot disentitle the manufacturer from availing Modvat credit does not require any interference. The appeal fails and is hereby dismissed. - HON'BLE RAJESH BALIA AND R.P. VYAS, JJ. For the Appellant : Vineet Kumar Mathur, Adv. For the Respondent : Rajendra Mehta, Adv. ORDER Rajesh Balia, J. 1. Heard learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt cause being shown to him, allow the filing of the declaration. 4. The manufacturer shall be allowed to take the credit of specified duty only if the capital goods are received in the factory premises of the manufacturer under the cover of a document specified under Rule 57G evidencing the payment of duty on such capital goods. 5. If the matter would have rested as that, obviously, respondent assessee was not entitled to avail MODVAT credit in case requisite declarations were made beyond 3 months from receipt of capital goods in factory. However, vide Notification No. 7/99 C.E.(N.T.), dated 9-2-99 sub-rule (13) was inserted as under :- 57T(13) Credit under sub-rule (6) shall not be denied on the grounds that - (i) any of the documents specified under sub-rule (3) of Rule 57G does not contain all the particulars required to be contained therein under these rules, if such document contains details of payment of duty, description of the capital goods, assessable value, name and address of the factory or warehouse; (ii) the declaration filed under sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer intending to take credit of the duty paid under Rules 57A and 57B on inputs used in manufacture of end product shall file a declaration in respect of in-puts with the Assistant Commissioner of Central Excise having jurisdiction over his factory. 8. Rule 57-Q provides for availing MODVAT of specified duty paid on the capital goods used by the manufacturer in his factory and for utilising the credit so allowed towards payment of Excise leviable on the final products. Rule 57-R provides for availing of MODVAT credit of the specified duty paid on the capital goods not owned by it shall be allowed if such capital goods are acquired by a manufacturer, on lease, hire-purchase, loan, other financial arrangements are to be used in manufacturing of end product by the manufacturer. 9. Rule 57R envisage substantive provision for availing MODVAT credit in respect of duty paid on capital goods though not owned by the assessee but acquired on lease or by loan for being used in manufacturing of end product by utilizing such capital goods in his factory. 10. The procedure for availing MODVAT credit of Duty paid on capital goods under Rule 57-Q or Rule 57-R has been provided under Rule 57-T. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57G evidencing the payment of duty on such capital goods. (13) Credit under sub-rule(6) shall not be denied on the grounds that - (i) any of the documents specified under sub-rule (3) of Rule 57G does not contain all particulars required to be contained therein under these rules, if such document contains details of payment of duty, description of capital goods, assessable value, name and address of the factory or warehouse; (ii) the declaration filed under sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirements under sub-rule (1): Provided that the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction over the factory of the manufacturer intending to take credit is satisfied that the duty due on the capital goods have been paid and such capital goods have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise shall record the reasons for not denying the credit so in each case. 11. Sub-rule (6) says that manufacturer shall be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or furnishing incomplete particulars should not come in the way of assessee in availing MODVAT benefit is clear intent of insertion of sub-rule 13 with effect from 9-2-99. 16. To this conclusion we find support from contemporaneous explanatory note issued by the Central Board of Excise Customs explaining the import of bringing in existence of sub-rule (13). The circular was issued by the Central Board of Excise on 23rd Feb.'1999 soon after the rule was inserted. It envisaged that sub-rule (11) in Rule 57G and sub-rule (13) in Rule 57-T of the Central Excise Rules, 1944 has been issued to empower the Assistant Commissioner of Central Excise having jurisdiction over the factory of the manufacturer to allow credit of duty paid on inputs/capital goods ignoring minor procedural lapses in filing the declaration or in the invoice/document based on which credit is to be taken. However, the Assistant Commissioner should ensure that inputs/capital goods have suffered duty and are being used/ are to be used in the process of manufacture. The Assistant Commissioner is also required to record the reasons in the file for allowing Modvat credit in each case. Significantly it specifically d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. It mandates not to issue show cause notice for withdrawing MODVAT credits availed by any manufacturer without conducting inquiries and satisfying that the Modvat credit availed by the assessee does not satisfy itself the substantive conditions. Adjudication proceeding in the normal course should not be initiated and show cause notice for withdrawal of modvat credit benefit be not issued lightly on technical grounds. 17. The expression used in clause (ii) of sub-rule (13) of Rule 57T envisages that credit under sub-rule (6) shall not be denied on the ground that the manufacturer fails to comply with any other requirement under sub-rule (1) : It must be in respect of requirement other than filing declaration containing requisite information i.e. to say it relates to limitation within which declaration has to be furnished. It leads to irresistible conclusion that while requirement of sub-rule (1) to file declaration is necessary, the within limitation prescribed under sub-rule (1) read with sub-rule (3) which operates as proviso thereto, is not mandatory requirement. If other substantial conditions have been satisfied the MODAVT credit availed on Capital goods is not to be withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
