Deemed registration and early Modvat credit claims require consideration of statutory deeming rules and circular guidance.

Rule 174(9) deemed registration after 30 days from the application, and that statutory consequence had to be considered before rejecting the registration claim. Rule 57Q Modvat credit was also examined in the context of initial factory set-up, with the Board's circular indicating that the declaration could be filed even before the factory came into existence or was registered, and with storage tanks treated as capital goods on the cited precedent. The impugned order was set aside and the matter remanded for de novo consideration after hearing the assessee, with interim stay granted.

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Issues: (i) Whether registration under Rule 174 of the Central Excise Rules was deemed to have been granted on the expiry of 30 days from the application, and (ii) whether Modvat credit under Rule 57Q could be claimed at the stage of initial setting up of the factory, including on storage tanks as capital goods.

Issue (i): Whether registration under Rule 174 of the Central Excise Rules was deemed to have been granted on the expiry of 30 days from the application

Analysis: The application for registration had been made and returned, but the deeming provision in Rule 174(9) requiring grant of registration within 30 days, failing which registration is deemed to have been granted, had not been considered in the impugned order. The non-consideration of this statutory consequence required fresh examination.

Conclusion: The issue was not finally determined and had to be reconsidered by the adjudicating authority.

Issue (ii): Whether Modvat credit under Rule 57Q could be claimed at the stage of initial setting up of the factory, including on storage tanks as capital goods

Analysis: The Board's circular clarifying that a manufacturer may file the Rule 57Q declaration even before the factory comes into existence or is registered was not considered. The cited Tribunal decision holding tanks eligible as capital goods also supported the appellants' prima facie case, and the Commissioner's view was found to be contrary to that precedent.

Conclusion: The issue was remitted for fresh adjudication and the appellants' claim was prima facie supported.

Final Conclusion: The impugned order was set aside and the matter was remanded for de novo consideration after hearing the appellants, with stay granted in the meantime.

Ratio Decidendi: A statutory deeming provision for registration and a binding departmental clarification on Modvat declarations at the stage of factory set-up must be considered, and a contrary finding on the eligibility of capital goods cannot stand without such consideration.

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