BHARAT HEAVY ELECTRICALS LIMITED Vs. CEC

JUDGEMENT

(1.) This is a Reference made by the Central Excise and Gold Appellate Tribunal, at the instance of the assessee, referring the following questions for consideration:-

(2.) By an order passed, the Tribunal on 17.10.2000, in Appeal No.E/1136/96-NB, contention of the assessee M/s Bharat Heavy Electricals Limited, challenging disallowance of MODVAT credit to the tune of Rs. 35,07,645/- and recovery of the same under Rule 57-I of the Central Excise Rules and imposition of penalty was rejected.

(3.) The assessee is engaged in manufacturing of various excisable goods. They are availing the facility of MODVAT credit of duty paid on inputs, in terms of the provisions of 57A of the Central Excise Rules. It was found on the basis of the duty paying documents that in the months of July, August and September 1995, the assessee had taken MODVAT credit to the tune of Rs. 35,07,645/- on the strength of duty paying documents which was found to have been issued more than six months prior to the date on which credit was taken. It was the case of the Revenue that under Rule 57G(2), the manufacturer is required to file a declaration under Rule 57G(1) after obtaining the dated acknowledgement, take credit of the duty paid on inputs received and in accordance to the second proviso to sub-rule, the manufacturer is restrained from taking credit after six months of the date of issuance of any documents specified. It was found that in the entries made in the documents maintained under RG-23 A - Part I & II, even though in Part I the entry is made showing date of taking availment of MODVAT credit within the stipulated period of six months, but in Part II as the date was beyond six months, the Tribunal held that the facility of MODVAT cannot be extended as the assessee has not shown availing of the benefit in accordance to the requirement of the Rule.