AUDICHEM INDIA LIMITED Vs. CCE

JUDGEMENT

(1.) The appellants had availed input duty credit of Rs. 24,301.50 under Rule 57 -A of the Central Excise Rules, 1944 for payment of duty on two by -products, namely, Acetic Acid and Hydrochloric Acid cleared during the period June to November, 1993. The Department issued a show -cause notice to the party asking them to show cause why the above by -products had not been declared as final products and also why the duty should not be recovered through PLA debit. The proposal was contested. The original authority dropped the proposal, holding that the non -declaration was only a minor procedural lapse and could not be sufficient ground to disallow credit which was otherwise admissible. In the appeal preferred by the Department, the Commissioner (Appeals) set aside the order of the lower authority. Hence this appeal of the assessee.

(2.) Heard both the sides and considered their submissions. There is no dispute regarding the duty -paid nature of the inputs, nor has the Department alleged that the inputs were not received in the appellants' factory and utilized in the process of manufacture of Acetic Acid and Hydrochloric Acid. In other words, the substantive conditions under Rule 57 -A for availment of Modvat credit of the duty paid on the inputs were satisfied. The only ground on which the lower appellate authority has denied the credit to the assessee is that the aforesaid by -products had not been declared as final products under Rule 57 -G of the Central Excise Rules, 1944. The learned Counsel for the appellants points out that the Tribunal's larger Bench has in the case of Kamakhya Steels Put Ltd v. Commissioner of Central Excise, Meerut 2000 (21) ELT 247 remanded a case involving non -filing of declaration under Rule 57 -G, to the original authority for de -novo adjudication of the question of admissibility of Modvat credit in the light of the amended provisions of Rule 57 -G (as per Notification No. 7/99 -CE (NT) dated 9.2.1999) and the Board's circular in clarification thereof. On a perusal of the judgement of the Larger Bench, I find that the amended provisions of Rule 57 -G and the Board's Circular No 441/7/99 -CX dated 23.2.1999 have been given retrospective effect and held to be applicable to pending cases. As per the amended provisions, Modvat credit on input was not to be denied on the ground that the declaration field under Sub -rule (1) of Rule 57 -G did not contain all the details required to be contained therein or on the ground that the manufacturer failed to comply with any of the conditions under Sub -rule (1). The ground raised in the impugned order for denying the Modvat credit in question is that the declaration filed by the assessee under Sub -rule. (1) of Rule 57 -G did not specify the aforesaid by -products, namely, Acetic Acid and Hydrochloric Acid. In view of the amended provisions which should be given retrospective effect as per the Board's Circular and the Larger Bench decision, I hold that the Modvat credit in question, which is otherwise admissible to the assessee, is not to be denied to them on the sole ground of non -declaration of the by -products as final products under Rule 57 -G (1). In the result, the impugned order is set aside and the appeal is allowed.