1996 (10) TMI 198 - AT - Central Excise

Tribunal allows Modvat credit, rejects penalty for delay in filing; no suppression found

The Appellate Tribunal set aside the Asstt. Commissioner's decision disallowing Modvat credit and imposing a personal penalty on the appellants. The ... Modvat Issues Involved:The issues involved in the judgment are:1. Disallowance of Modvat credit and imposition of personal penalty by the Asstt. Commissioner.2. Delay in filing Modvat declaration and condonation of the same.3. Determination of whether certain goods qualify as capital goods under Rule 57Q of the Central Excise Rules, 1944.4. Assessment of whether penalty imposition was justified.Issue 1 - Disallowance of Modvat Credit and Penalty Imposition:The Asstt. Commissioner disallowed Modvat credit of Rs. 15,468.25 and imposed a personal penalty of Rs. 10,000 on the appellants for availing modvat facilities based on discrepancies in the filing of modvat declaration.Issue 2 - Delay in Filing Modvat Declaration:The appellants, engaged in manufacturing synthetic rubber, filed a modvat declaration under Rule 57T(1) for availing Modvat credit under Rule 57Q after receiving goods, leading to a show cause notice. The appellants explained the delay in filing the declaration, citing reasons and referring to relevant circulars.Issue 3 - Qualification of Goods as Capital Goods:Expert technical opinion from Chartered Engineer Shri V.P. Agarwal deemed certain goods like sleeves, mechanical seals, PT-100 sensor, and LDPE Black Lay Flat Tubing as capital goods under Rule 57Q, essential for production. The opinion was not considered by the ld. Commissioner (Appeals), leading to the allowance of Modvat credit for these items.Issue 4 - Justification of Penalty Imposition:No suppression, wilful misstatement, or intention to evade duty payment was found, leading to the conclusion that no penalty was warranted in the case.In conclusion, the Appellate Tribunal set aside the impugned order, allowing the appeal based on the condonation of delay in filing the declaration, recognition of certain goods as capital goods eligible for Modvat credit, and the absence of grounds for penalty imposition.