Customs, Excise and Gold Tribunal - Delhi
Greysham And Co. vs Commissioner Of Central Excise on 16 September, 1996
Equivalent citations: 1998(99)ELT75(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is an appeal against the order of Commissioner (Appeals), New Delhi, dated 28-6-1996/12-7-1996.
2. The appellants have filed a stay application for waiver of the pre-deposit of the amount in question.
3. Learned Counsel states that in this case, the appellants have filed Modvat declaration but late and therefore, action has been initiated against them and they have been denied the Modvat credit and penalty has also been imposed.
4. The appellants had filed their first declaration by sending it by post on 3-6-1994 but the Assistant Collector has noted that the credit had been taken since 1-5-1994 i.e. for a period more than one month before the declaration was stated to have been sent by post. Further, the same was not received in the A.C.'s office. Subsequently, when the show cause notices were issued, the appellants had filed a declaration on 10-11-1994. The A.C. had, however, noted that even this, was filed after the issue of show cause notice dated 11-10-1994.
5. The A.C. has taken the view that filing the Modvat declaration before utilisation was a requirement under Rule 57G and since this requirement was not fulfilled in time, therefore, the credit was required to be denied and a penalty was imposable.
6. It was, however, their contention that although there was a delay in filing the declaration, there is no denial of the fact that the inputs were received and utilised for the purpose for which the declaration was ultimately filed and inputs and outputs are covered by the Modvat scheme and there are Tribunal's orders to the effect that a mere delay in filing the declaration should not result in disallowing the credit as apparent from the Tribunal's order in the case of Collector of Central Excise v. Shimoga Steels Ltd. reported in 1992 (62) E.L.T. 561 (Tribunal).
7. In these circumstances, he would request that the pre-deposit of the credit amount and the penalty imposed may be waived and further, the appeal itself may be heard and disposed of on the basis of the above submissions.
8. Learned DR states that admittedly, it is a case of delay in filing the declaration and in fact, even the first declaration said to have been sent by post was not received in the office but even if it is taken as the date of filing, the credit had been taken even before this date which was not permissible. Further-more, the second declaration was filed after the issue of the show cause notice and since there was a long delay and this essential requirement was not fulfilled, it amounts to a case of wrong availment of credit. Hence, the A.C. was justified. However, he has no objection if the pre-deposit is waived and matter itself is heard and disposed of on the basis of above submissions.
9. We have considered the above submissions. We observe that admittedly, it is a case of delay in filing the declaration required to be filed under the Rules prior to the availing of the Modvat credit. However, we also take note at the same time that there is no dispute that the inputs have been ultimately declared and utilised for the manufacture of the declared items. In the circumstances, we feel that the pre-deposit of the amount in question should be waived and since only a small point is involved, the appeal itself may be disposed of. Hence, with the consent of both the sides, we proceed for the purpose of deciding the appeal.
10. In this respect, we further notice that the case cited by the learned Counsel is distinguishable inasmuch as it is a case where Rule 57H was also involved. The filing of a declaration is an important part of the procedure which has been prescribed and the purpose is to enable the officers to verify the declaration, if necessary. Therefore, in the normal course, the appellants should have filed the declaration before taking the credit or availing the same. However, since there is no dispute on the basic fact that the Modvat credit was otherwise available, we hold that in the circumstances, the credit need not have been disallowed but a penalty could be imposed. Hence, we set aside the order insofar as it relates to disallowing the credit but uphold the penalty imposed on the appellants. The orders of the lower authorities are modified to that extent. The appeal is disposed of in the above terms.