2002 (1) TMI 415 - AT - Central Excise

Importance of Compliance in Modvat Credit Appeals: Procedural Rules and Eligibility Criteria

The appeal was dismissed as the appellants failed to provide sufficient evidence to support their claim for Modvat credit on phosphoric acid from ... Appeal to Appellate Tribunal - Modvat on inputs Issues:1. Dispute regarding Modvat credit on phosphoric acid declared as input.2. Ignoring declaration dated 31-12-90 for credit from that date.3. Interpretation of eligibility criteria for Modvat credit.Issue 1: Dispute regarding Modvat credit on phosphoric acid declared as input:The appeal was against the Commissioner's order denying Modvat credit on phosphoric acid, declared as an input in the manufacture of sugar. The appellants argued that credit should have been extended from 31-12-90 as per their declaration under Rule 57G. However, the Commissioner found that the declaration was actually filed on 10-8-93, not in December '90. The appellants did not request credit from 31-12-90 to the Asstt. Collector despite opportunities, leading to the rejection of the appeal.Issue 2: Ignoring declaration dated 31-12-90 for credit from that date:The appellants contended that the lower appellate authority ignored their declaration dated 31-12-90, seeking credit from that date. However, they failed to provide documentary evidence supporting their claim for credit from 31-12-90. The absence of a show cause notice prior to the proceedings was raised, citing precedents, but the Department argued that the credit period should align with the Asstt. Collector's determination from 10-8-93.Issue 3: Interpretation of eligibility criteria for Modvat credit:The Tribunal noted that the denial of credit from 10-8-93 formed the basis of the proceedings, limiting any retrospective orders beyond the notice period. The eligibility for Modvat credit on phosphoric acid was not solely dependent on the declaration but also on factors like receipt of duty paid inputs and prescribed documents under Rule 57G within the factory premises. The Lower Authority's decision to grant credit from 31-12-90 without considering all eligibility aspects was deemed inappropriate, emphasizing the importance of following tribunal orders and providing necessary documents for credit availing.In conclusion, the appeal was dismissed, highlighting the significance of complying with procedural requirements and providing adequate evidence to support claims for Modvat credit, especially concerning the eligibility criteria specified under the law.