AMMARUN FOUNDARIES Vs. CUSTOMS, EXCISE AND SERVICE TAX

JUDGEMENT

(1.) Whether rule 57G sub-rule (5) of the Central Excise Rules can be applied to deny the balance amount of Modvat credit when portion of the credit has already been availed of by the appellant against the invoices is the point falling for consideration in this appeal. The appellant is engaged in the manufacture of rough iron castings falling under Tariff Heading 7325.10 of the Central Excise Tariff Act. During the period of April, 1999 to July, 1999, against 19 numbers of invoices relating to input "furnace oil", the appellant availed of Modvat credit only to the extent of 50 per cent, and the said 50 per cent, credit was taken within the time prescribed under the Central excise rule 57G sub-rule (5). It is the case of the appellants that due to inadvertence, they have not taken the balance credit of 50 per cent. After realising the mistake of not taking the entire credit, the appellants wrote a letter dated November 16, 1999 seeking permission to take the balance credit of 50 per cent. Vide the letter dated January 12, 2000, the Assistant Commissioner permitted the appellant to take the balance credit of 50 per cent, relating to furnace oil, subject to the observation of rule 57G sub-rule (5). Based on the said letter of the Assistant Commissioner, the appellant took credit of 50 per cent, of the balance credit on January 21, 2000.

(2.) The appellant was issued with a show-cause notice dated March 23, 2000 for the denial of the above credit on the ground that the credit was taken beyond six months period in violation of rule 57G sub-rule (5). By order dated July 13, 2000, the adjudicating authority confirmed the demand raised in the show-cause notice. In the appeal preferred by the appellant, the appellate authority rejected the appellant's contention and held that the appellant availed of the credit beyond the period of six months. The appellant went before the CESTAT and the CESTAT dismissed the appeal holding that the period of limitation can only be computed from the dates of the duty paying document. The CESTAT further held that it was not obligatory for the Department to grant any permission to the assessee to avail of the credit and while so the permission given by the Assistant Commissioner had no consequence.

(3.) Aggrieved by the same, the present appeal is filed by the assessee and the same is admitted on the following substantial questions of law: