2005 (6) TMI 323 - AT - Central Excise

Limitation period for input duty credit computed from duty document issue, not permission date. Modvat credit denial upheld. Appeal dismissed.

AMMARUN FOUNDRIES Versus COMMISSIONER OF CENTRAL EXCISE, COIMBATORE

AMMARUN FOUNDRIES Versus COMMISSIONER OF CENTRAL EXCISE, COIMBATORE - 2005 (188) E.L.T. 325 (Tri. - Chennai) Issues:1. Denial of Modvat credit on furnace oil by lower authorities for a specific period.2. Computation of the period of limitation for availing input duty credit under Rule 57G.Issue 1: Denial of Modvat credit on furnace oilThe appellants were denied Modvat credit of Rs. 1,06,396 on furnace oil for the period April to July, 1999 by lower authorities. Initially, 50% of the credit was taken by the party, and later they sought permission to avail the remaining credit as they believed the restriction in Rules 57C and 57CC did not apply to fuels. The jurisdictional Assistant Commissioner granted permission for availing the balance credit on furnace oil. However, the department issued a show cause notice proposing to disallow the credit as time-barred since it was taken beyond six months from the date of invoices.Issue 2: Computation of the period of limitation for availing input duty creditThe consultant for the appellants argued that the period of limitation should be reckoned from the date the department granted permission for availing the credit, citing precedents like Orient Paper & Industries Ltd. v. CCE, Indore and CCE, Hyderabad v. Aurobindo Pharma Ltd. However, the Departmental Representative contended that the decisions cited were not applicable to the case as there was no statutory embargo or delay by the department in granting permission. The Assistant Commissioner's permission did not impose any legal requirement on the appellants to avail the credit.The Tribunal held that the period of limitation for availing input duty credit under Rule 57G should be computed from the date of issue of the duty-paying document, not from the date of permission granted by the Assistant Commissioner. The entry of furnace oil in RG 23A Part I did not constitute availing Modvat credit, which was done in Part II after the six-month period had expired. The Tribunal distinguished the present case from precedents cited by the appellants, emphasizing that no departmental permission was necessary for taking the input duty credit in question, and the permission granted had no legal consequence. Therefore, the contention that the limitation period should be reckoned from the date of permission was rejected.In conclusion, the impugned order denying the Modvat credit was upheld, and the appeal was dismissed.