Modvat credit and delayed Rule 57G declaration: appellate condonation upheld, and credit sustained despite late filing.

Modvat credit was treated as admissible where the Rule 57G declaration was filed after credit had been taken, because the delay had been condoned by the Commissioner (Appeals). The appellate authority's power to modify the lower order was held to include sustaining such condonation, especially where there was no legal infirmity or factual challenge to the exercise of discretion. The contention that only the Assistant Collector could grant condonation was rejected as untenable, and the relaxation introduced by amendment to the Central Excise Rules was also noted. Credit was therefore upheld.

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Issues: Whether Modvat credit was admissible when the declaration under Rule 57G was filed after the credit was taken, and whether the Commissioner (Appeals) could validly condone the delay and allow the credit.

Analysis: The declaration was filed two days after the credit was availed, but the delay had been considered and condoned by the Commissioner (Appeals). The appellate authority has power to modify the order of the lower authority, and that power includes sustaining condonation of delay where the order under challenge does not show any legal infirmity or factual challenge to the exercise of discretion. The appeal proceeded only on the contention that condonation could be granted by the Assistant Collector alone, which was rejected as unsustainable. The relaxation introduced by the amendment to the Central Excise Rules was also noted.

Conclusion: The credit was held admissible and the condonation of delay by the Commissioner (Appeals) was upheld.

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