Customs, Excise and Gold Tribunal - Delhi
Aarvee Waxpol Tools (I) Pvt. Ltd. vs C.C.E. on 24 July, 1997
Equivalent citations: 1997(95)ELT426(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is a stay application filed against the order of Commissioner of Central Excise, Ghaziabad dated 21-4-1997.
2. Ld. Counsel stated that the appellants are manufacturers of hand tools viz. Pliers, spanners, etc. They purchased various machines during the period March, 1994 to December, 1994.
3. The appellants got registered with the Central Excise on 19-12-1994. On 25-12-1994 there was trial run of the unit; And on 16-1-1995 declaration under Rule 571(1) was filed. On 19-1-1995 credit was taken in RG 23C Part II Register; And on 31-1-1995 intimation was filed to the Superintendent under Rule 57T(2). On 3-2-1995 application for condonation of delay was filed; In spite of it a show cause notice was issued alleging that the appellants are not eligible to Modvat credit as in respect of Sl. No. 6 to 11 it was alleged that the goods have been received and installed prior to the registration of the unit and the declaration under Rule 57F (sic) has not been filed within time. And in respect of Sl. 1 to 6 and 12, it was alleged that the credit was not admissible as the items did not conform to the definition of capital goods in terms of Rule 57Q. On 21-4-1997 Commissioner (A) confirmed the order-in-original.
3. It was their contention that prior to December, 1994, there was no factory in existence, therefore the date of registration i.e. 19-12-1994 should be taken as the date on which the factory came into existence and also as the date of receipt of goods in the factory. The delay, if any, is therefore within a period of 3 months and condonable. Balance credit has been denied on the ground that these items do not conform to the definition of capital goods.
4. Ld. Counsel reiterated the appellants case and drew attention to their balance sheet as on 31st March, 1995 and the Profit and Loss Accounts for the year 31-3-1995, dated 4th September, 1995 and 31-3-1996, dated 4-9-1996.
5. Ld. DR drew attention to the impugned order, Section 2(f) of the Central Excise Act and the definition of capital goods even in the rules in support of the department's contention that the Modvat credit has been rightly denied. He emphasised that admittedly the goods had been received and installed prior to the registration of the unit and the declaration under Rule 57 had not been filed within time. And furthermore, the items in question did not satisfy the definition of capital goods. The balance sheet filed is only of 1995 and not the latest one and further it only shows a nominal loss and does not indicate that the appellant will be put to undue hardship if they were required to deposit the amount in question.
6. I have considered the above submissions. I observe that prima facie the appellants appear to have a stronger case insofar as the question of the goods received and installed prior to the registration and declaration under 57F (sic) is concerned inter alia in view of the certificate of date of production and the declaration under Rule 57T(1) and their application for condonation of delay and other factors about which it would be more appropriate to comment only at the time of hearing of the appeal. Insofar as the items which have been claimed as capital goods are concerned again prima facie some of the items appear to fall in this category whereas about others the matter is arguable. I also note that the net loss in the Profit and Loss Account for the year 31-3-1996 has been shown as 5,612,708.71 although the balance sheet for the year 1997 has not been filed. Looking to the totality of facts and circumstances, and noting the above factors in particular it would be appropriate to waive the pre-deposit of the amount in question and grant stay of its recovery during the pendency of the appeal subject to the appellants depositing Rs. 5,000/- within 8 weeks of the receipt of this order as already announced in the open Court.