Punjab-Haryana High Court
The Commissioner Of Central Excise, ... vs M.C. Handa & Brothers, Jalandhar And ... on 26 July, 2001
Author: Ashutosh Mohunta
Bench: Ashutosh Mohunta
JUDGMENT Ashutosh Mohunta, J.
1. The Revenue has filed this reference petition wider Section 35H(1) of the Central Excise Act, 1944 against the order dated January 4, 2001 passed by the Customs, Excise & Gold (Control) Appellate Tribunal-respondent No.2.
2. Briefly stating, the facts of the case are that M/s M.C. Handa & Brothers (respondent No. 1) are the manufacturers of valves and cocks. They availed the facility of mod-vat credit to the tune of Rs.14,754/- on electrolytic high grade zinc metal. However, be-fore availing of the credit on the input, no declaration under Rule 57G of the Central Excise Rules, 1944, was filed. A revised declaration was filed on July 30, 1996 wherein it was prayed that Central Excise Duty had already been paid on the electrolytic high grade zinc metal and therefore they are entitled to get modvat credit. They also prayed that the delay be condoned.
3. The Assistant Commissioner vide order dated April 3, 1997 disallowed the credit of Rs. 14,754/- and also imposed a penalty of Rs.2,000/- on the ground that the company was an old assessee and had failed to prove modvat declaration. Moreover, according to the adjudication authority, there was no reason to condone the delay. The respondent M/s M.C. Handa & Brothers filed an appeal before the Commissioner (Appeals), who vide his order dated December 29, 1998, allowed the credit. However, the penalty imposed was maintained. The Commissioner, central Excise, filed an appeal against the or-der dated December 29, 1998 before the tribunal, which was dismissed vide order dated January 4, 2000.
4. Hence the present reference petition requiring the Tribunal to slate the facts of the case and refer the following question of law, which, according to the Revenue, arises in the present case:-
"Whether the Hon'ble Tribunal is justified in allowing the credit on inputs in respect of which declaration has not been filed under Rule 56G of the Central Excise Rules, 1944 as filing a declaration is a substantive requirement and not a procedural or technical one because the Rule 57G of the Central Excise Rules, 1944 prescribes that assessee shall file a declaration and obtain a dated acknowledgement of the said declaration and after obtaining the acknowledgement aforesaid, shall take credit of duty on the inputs issued by him'?"
5. Mr. Rajesh Cumber, counsel for the Revenue argued that as per Rule 57G of the aforesaid Rules a declaration in respect of the inputs and the final product has to be filed before taking the credit. He has submitted that as respondent No. 1 has availed of the modvat credit without filing the declaration in respect of the input, hence the benefit of inodvat credit in respect of the electrolytic high grade zinc metal should not be allowed.
6. We have considered the argument of Mr. Gumber. The respondent had on earlier occasions also been availing of the benefit of modvat credit with regard to the above-mentioned input and necessary declarations had been filed. Delayed filing of declaration, as required under Rule 57G of the Central Excise Rules, 1944, is merely a procedural lapse. The Revenue has not denied the benefit on the ground that the inputs were not duty paid or that the electrolytic high grade zinc metal was not used in the manufacture of the final product, which was valves and cocks. The credit was disallowed only because it was availed after claiming the benefit of modvat. For this a penalty of Rs.2,000/- has already been imposed. As Central Excise Duty had already been imposed in the first instance on the electrolytic high grade zinc metal, therefore, the respondent was entitled to get the modvat credit for this input. We find no infirmity in the impugned order.
7. No other points has been raised.
8. In view of the above, the reference filed by the Revenue is declined.
Sd/- Jawahar Lal Gupla, J.