COLLECTOR OF CENTRAL EXCISE Vs. BHARAT CONTAINERS PVT LTD

JUDGEMENT

(1.) THIS is an appeal filed by the department against the order of the Collector (Appeals) bearing No. V-2(83.12) 1794/88, dated 26-10-1988.

(2.) Brief facts of the case are that the respondents availed of the MOD VAT credit in respect of Aluminium Tubes without filing the proper declaration as required under Rule 57G of the Central Excise Rules. They availed of the MODVAT credit from Feb. 87 to Sep. 87. Since proper declaration was not filed in respect of the goods, namely aluminium tubes, show cause notice was issued on 2-2-1988 for recovering the credit taken under the MODVAT scheme during the aforesaid period. In the adjudication proceedings, initiated by the Assistant Collector, demand for Rs. 63,642.48 was confirmed under the provisions of Rule 57-I (1) of the Central Excise Rules. The respondents went in appeal before the Collector (Appeals). The Collector (Appeals) without going into the other merits of the appeal, allowed the appeal of the respondents on the ground that the demand is barred by time and hit by limitation laid down under Section 11A of the Act and the Supdt. was not competent to decide the issue of show cause notice. He, however, directed that the Assistant Collector or Supdt. is free to put up papers to the Collector of Central Excise, Bombay-II, for whatever action he deems fit.

(3.) SHRI D.D. Gwalani, the learned advocate for the respondents, admits that no proper declaration was filed in respect of Aluminium tubes. All the same it is not the contention of the department that aluminium tubes are not the inputs entitled to credit under the MODVAT scheme in the case of the respondents. The aluminium tubes are notified as eligible for MODVAT. The mere technicality of not filing the declaration should not be viewed seriously for denying the credit. In this context he relied on the decision reported in 1988 (36) ELT 651, where the Tribunal has held that the formality of filing the declaration required under Notification No. 201/79 has been condoned by the Tribunal. He also cited the decision of this Bench in S.M. Energee Teknik case reported in 1989 (42) ELT 700 and argued that this Bench has taken the view that the provisions of Section 11A are applicable even to recovery of MODVAT credit. He also cited the decision of the South Regional Bench reported in 1987 (37) ELT 478, wherein that Bench have held that the limitation of six months will always come into operation, whenever the department seeks recovery on the ground of error, even though Rule 56A does not prescribe any limitation period. He, therefore, contended that the order of the Collector (Appeals) allowing their appeal on the grounds of time bar is legally correct and even on grounds of equity, since the input is eligible for MODVAT credit, denial of the same only on the ground of non-declaration is not justifiable.