V.G. PAPER AND BOARDS LTD. Vs. CCE

JUDGEMENT

(1.) The appellants were engaged in the manufacture of paper falling under Chapter 48 of the Central Excise Tariff Schedule. In March, 1999, the department found that, in respect of certain capital goods received in their factory on 21.9.1996 and 14.8.1996, they had indicated in their Modvat declarations filed under Rule 57T that the said capital goods had been received on 2.12.1996 and 25.11.1996 respectively. Thus it was detected that the declarations were filed beyond the period of three months (prescribed under Rule 57T) from the dates of receipt of the capital goods. The party requested for condonation of this delay, which was allowed by the Assistant Commissioner. Thereupon, the assessee took Modvat credit on the capital goods. However, they reversed this credit later on when confronted by Audit objection. Subsequently a show -cause notice was issued by the department on 28.2.2001 proposing to disallow the above credit (Rs.9,68,200/ -) and imposed a penalty. These proposals were upheld by the original authority which ordered recovery of Rs. 9,68,200/ - and imposed a penalty of equal amount. Aggrieved, the party preferred an appeal to the Commissioner (Appeals), contending, inter alia, that the Modvat credit was not deniable to them in view of the Tribunal's Larger Bench decision in the case of Kamakhya Steels (P) Ltd. . The appellate authority rejected the contentions and recorded a finding that the appellants had intentionally misdeclared the dates of receipt of the goods in order to circumvent the statutory time limit for filing Modvat declaration. On the basis of this finding, the lower appellate authority upheld the order of the original authority. Hence the present appeal.

(2.) Ld. Counsel for the appellants submits that the delay of filing of Modvat declarations had been duly condoned by the Assistant Commissioner and that decision was never reviewed or revised. In the circumstances, according to the ld. Counsel, it was not open to the department to deny the Modvat credit to the appellants on the ground of delayed filing of Modvat declaration. This argument is contested by ld. DR, who submits that the appellants had fraudulently indicated wrong dates as dates of receipt of the capital goods with clear intent to get over the bar of limitation (for filing declaration) provided under Rule 57T. In view of this fraud, according to ld. DR, it was open to the department or recover the credit wrongly availed and to impose penalty on the assessee for irregular availment credit, without any review or revision of the Assistant Commissioner's order of condonation of delay of declaration. In this connection, ld. DR relies on the Supreme Court's Judgment in the case of UOI v. Jain Shudh Vanaspati Ltd. , wherein it was held that, without the order of clearance under Section 47 of the Customs Act being revised under Section 130 of the Act, the importer of the goods could be called upon to pay short -paid duty under Section 28 of the Act where it was found that clearance of the goods was obtained fraudulently. The DR submits that the Apex Court's ruling in the customs case of Jain Shudh Vanaspati Limited was followed by the Court in a Central Excise case vide CCE, Bhubaneshwar v. Re -rolling Mills . Ld. DR also relies on the Supreme Court's Judgment in Commissioner of Customs v. Candid Enterprises , wherein, after finding fraud on the part of the assessee, the Court condoned the delay of an appeal of the department. In his rejoinder, ld. Counsel cites the following decisions in his endeavour to get over the case law cited by the DR.