STAR PAPER MILLS LTD. Vs. CCE

JUDGEMENT

(1.) THE Assistant Commissioner of Central Excise, Division Saharanpur vide his order dated 30.12.1997 disallowed the modvat credit amounting to Rs. 2,88,234/ - to the appellants. The modvat credit is taken on 16.3.1996 on the strength of the invoices issued during the period 28.1.1995 to 31.3.1995. It is stated that the credit is taken after expiry of six months from the date of issue of invoices which is considered irregular in terms of second proviso to sub -rule (2) of rule 57G of Central Excise Rules, 1944. On appeal the Commissioner (Appeals), Ghaziabad vide Order -in -Appeal dated 17.3.1999 observed that even the modvat declaration under rule 57G was filed on 25.9.1995, and the application under rule 57H was made on 18.10.1995. The credit was taken prior to filing of the declaration/application which is contrary to laid down procedure. He has accordingly dismissed the appeal of the party upholding the order of the original authority,

(2.) I have carefully considered the submission made before me. In this case, it is not in dispute that the appellants took modvat credit after six months of the date of issue of the invoices. The only argument advanced by the appellants in this regards is that they had taken the credit in a separate RG 23A Pt. I and II and intimated the department about it. Therefore, it is claimed that taking of the modvat credit is not beyond a period of six months. This contention of the party cannot be countenanced. The Form RG 23A is in two parts Pt. I relates to the Account of the stock of inputs for use in or in relation to the manufacture of 'final products' and Pt. II is the 'Entry book of duty credit'. On specific query during the course of hearing of the appeal, the ld. Counsel for the appellants was not able to state whether any entries other than the ones relating to the inputs for fabrication of storage and process tanks - -were made in the aforesaid separate modvat register. There is also force in the submission of the ld. DR that this account was never submitted along with the RT -12 returns of the party as it was done in case of their other modvat account in compliance with the provisions of sub -rules (2A), (3) and (4) of Rule 57G. In view of these facts, even if the departmental authorities were made aware of such account, no weightage can be assigned to it. Therefore the date of taking of the credit in their regular modvat account alone is relevant for this purpose. The departmental authorities have not been given any power to condone the delay in taking the modvat credit. However, it is observed that though in the show cause notice dated 26.9.1996 it is mentioned, "Even if assessee's letter dated 18.10.1995, submitted as an intimation under Rule 57H, is considered the credit claimed is beyond six months." It is observed that there are no findings recorded in the Order -in -Original on the claim of the party for their eligibility to modvat credit under Rule 57H. In view of this, therefore, it is only fair that their claim under this rule should be examined and the findings given. In view of the above, the claim for modvat credit under Rule 57G(2) is not tenable and the same is rejected. The matter is remanded to the Deputy/Assistant Commissioner to examine the admissibility of the credit under Rule 57H and record his clear findings. The appellants shall be provided reasonable opportunity to state their case before him by the original authority.