COMMISSIONER OF CENTRAL EXCISE Vs. Z.A. ENTERPRISES

JUDGEMENT

(1.) THE issue involved in this Appeal preferred by the Revenue is whether the Respondents M/s. Z.A. Enterprises were eligible to avail of Mod -vat credit under Rule 57H of the Central Excise Rules in respect of inputs lying in stock on 31 -3 -1995 without the permission of the Assistant Commissioner.

(2.) THE facts in brief are that Modvat credit under Rule 57A was made available in respect of Plastic Bags and sacks with effect from 16 -3 -1995. The Respondents filed a declaration for availing of Modvat credit on such sacks under Rule 57G on 6 -7 -1995. Further, they, in their letter dated 4 -9 -1995, requested for allowance of Modvat Credit on sacks with effect from 1 -4 -1995 which was permitted to them by the Assistant Commissioner under letter dated 18 -3 -1996 condoning the delay in filing the declaration under Rule 57G. The Respondents availed total Modvat Credit of Rs. 65,857.95 ps. which included the credit in respect of these sacks lying in stock with them as on 31 -3 -1995. The Assistant Commissioner disallowed the Modvat Credit of Rs. 20,653,95 ps. pertaining to the stock of sacks lying on 31 -3 -1995 holding that the Respondents had not sought any permission under Rule 57H upto 15 -4 -1995 to avail of the Modvat Credit in respect of sacks lying in stock as on 16 -3 -1995; that as per provisions of Sub -rule 57H(1) no credit was to be allowed under the said rule in respect of inputs received or declaration made under Rule 57G on or after the 15th day of April 1995; that the Respondents had filed a request on 8 -1 -1997 for allowing this credit which is beyond the date of 15th April, 1995 as provided in the Rule 57H(1). On Appeal filed by the Respondents, the Commissioner (Appeals), under the impugned order, set aside the Assistant Commissioner's order and allowed the appeal holding that the Respondent's request for condonation of delay was accepted by the Assistant Commissioner; that the Respondents had requested the department to allow the credit of Rs. 59,182.72 ps. which included the disputed Rs. 20,653.95. in their letter of condonation which was objected to by the Assistant Commissioner.

(3.) SHRI T.A. Arunachalam, ld. DR submitted that the Assistant Commissioner had only condoned the delay in filing the declaration under Rule 57G and had allowed the Respondents to avail the credit on HDPE sacks from 1 -4 -1995. Accordingly they were not entitled to avail the credit of Rs. 20,653.95 in respect of HDPE sacks lying in stock as on 31 -3 -1995 because they had not applied for taking the credit in respect of these goods under Rule 57H which put the restrictions for allowing credit if declaration is made on or after 15 -4 -1995. He finally submitted that the Respondent's request dated 8 -1 -1997 for allowing the credit under Rule 57H was rejected by the Assistant Commissioner in view of the provisions of Rule 57H.