Late Rule 57T declaration did not bar Modvat credit where filing preceded credit and sufficient cause was shown.

Penalty under Rule 209(1)(bb) of the Central Excise Rules, 1944 was held not to be imposable where capital goods had been received and used in manufacture, the Rule 57T declaration was filed later with a request for condonation of delay, and Modvat credit was taken only after the declaration was filed. The text notes that Rule 57T permitted subsequent filing on sufficient cause being shown, and that the Board's circular stated credit should not be denied merely because the declaration was filed after receipt of the capital goods, so long as it was filed before credit was taken. On that basis, the appeal was allowed.

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Issues: Whether penalty under Rule 209(1)(bb) of the Central Excise Rules, 1944 was imposable where the capital goods had been received, the declaration under Rule 57T was filed later with an application for condonation of delay, and Modvat credit was taken after filing of the declaration.

Analysis: The capital goods were admittedly received in the factory and used in the manufacture of finished goods. The declaration under Rule 57T was filed in January 1998 and the credit was taken only after the declaration had been filed. Rule 57T also contemplated filing of declaration subsequently on sufficient cause being shown. The Board's Circular No. 181/15/96-CX. stated that credit should not be denied merely because the declaration was filed after receipt of the capital goods, provided the declaration was filed before taking credit.

Conclusion: Penalty was not imposable and the appeal was allowed.

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