Customs, Excise and Gold Tribunal - Calcutta
M/S. Hindustan Development ... vs C.C.E., Kolkata on 28 May, 2001
Equivalent citations: 2001(138)ELT315(TRI-KOLKATA)
ORDER
Archana Wadhwa:
1. Modvat credit of Rs.2,89,412.00 (rupees two lac eighty nine thousand four hundred twelve only) has been disallowed by the authorities below in respect of Light Diesel Oil claimed by the appellants in terms of provisions of Rule 57H.
2. Shri. S. S. Guha, learned Consultant appearing for the appellants submits that Light Diesel Oil was brought under Modvat Scheme w.e.f. 1.3.94. They were having some stock of the said inputs lying as such or in the shape of final product in their factory as on 28.2.94 and in terms of Rule 57H, they were entitled to the Modvat Credit of duty paid thereon subject to fulfilment of other condition. Accordingly they filed an application with their jurisdictional superintendent on 20.1.95 for availing credit in terms of the transitional Rule 57H. The Revenue's objection was that before moving the said application they have already availed credit on 31.12.94 and as such the credit became inadmissible to them. On this basis Show-cause Notice was issued to them proposing to deny the credit. Shri Guha submits that even if taking of credit prior of filing of declaration under Rule 57H is a procedural irregularities, the same will not result in any revenue loss inasmuch as they could have reversed the entry and again credit the same on the application being decided in their favour. As such the entire exercise was revenue neutral. He also makes it clear that though the credit was availed by the appellants in their record but the same was no utilised. He refers the Tribunal's decision in the case of Modi Alkalies & Chemicals Ltd. vs. C.C.E., Jaipur - 2000 (121) ELT 792 (T) where in it was held that credit in respect of capital goods taken before installation of goods should not result in denial of substantive benefit of Modvat credit otherwise available to the appellant. He also submits that Show-cause Notice proposed to deny Modvat credit only on the said ground whereas impugned order the Assistant Commissioner has rejected their application by observing that the appellants could not produce any evidence on record to show that the inputs, either as such or as contained in the final product, were lying in the stock. He submits that they have all the documentary evidence if given a chance they could prove before the Assistant Commissioner.
3. After hearing Shri. A.K. Chattopadhaya, learned JDR, I observe that though taking of credit before the actual permission of the Assistant Commissioner under Rule 57H as they stood at the relevant time, amounts to contravention of the provision of law but the same is not of such a serious nature so as to deny the benefit of credit to the appellants. As observed by the Tribunal in the case of Modi Alkalies & Chemicals Ltd. relied upon by the appellants, the credit taken by the assessee before installation of the goods, even if ordered to be reserved, the moment, the goods get installed the assessee can again take the credit. Thus the entire exercise of reversing credit and taking credit is revenue neutral. At this stage Shri Guha also submits that under the provisions of Rule 57H (b)(i) specific permission of the Asst. Commr. was not necessary. However in view of the law laid down by the Tribunal in the case of Modi Alkalies & Chemicals and by applying the ratio of the same to the facts and circumstances of the case I hold that denial of credit on this ground simpliciter was not justified and accordingly I set aside the impugned order and remand the matter to the Asst. Commr. to decide the appellants' application afresh. Needless to say that before decision, the appellants would be given an opportunity to place evidence before the Adjudicating authority as regards the inputs lying in stock either as such or as contained in the final product. Appeal is allowed by way of remand.
(Dictated & pronounced in Court)