2002 (4) TMI 678

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....s used in the manufacture of final products viz. man-made fabrics under Notification No. 29/96-C.E. (N.T.), dated 3-9-1996 as amended by Notification No. 14/98-C.E. (N.T.), dated 2-6-1998. The Central Excise Officers on verification of RT 12 return and RG-23A Part II account of the party for the month of December, 1998, observed that they had taken the deemed credit of Rs. 58,955/- on the inputs after a period of more than six months of the removal of the fabrics from their factory under AR-4 dated 20-5-98. Accordingly, they were issued a show cause notice dated 18-6-99 in which it was alleged that as per the provisions of Notification No. 29/96-C.E. (N.T.) dt. 3-9-96 as amended, the credit of declared duty deemed to have been paid is allow....

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....her imposed a penalty of Rs. 2,500/- on them. 3. The party filed an appeal but the same is rejected by the Commissioner (Appeals), Bhopal, vide his order dated 18-4-2001. 4. I have heard Shri Shekhar Vyas, ld. Advocate for the appellants and Shri B.C. Mahey, ld. JDR for the respondents. The ld. Counsel for the appellants submits that the deemed credit is extended to the appellants in terms of Notf. No. 29/96-C.E. (N.T.) dt. 3-9-96 and that the order passed with reference to the time-limit of six months provided under Rule 57G(5) read with Rule 57G(3) is clearly an error. It is contended that this rule stipulates that the credit is to be taken within six months from the date of duty paying document specified in Rule 57G(3); that ....

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....manufacturer, therefore has to avail deemed credit of duty only at the time of clearance of the final products and there is no scope for him to avail such credit after such clearance. In this case, the goods are cleared for export on 20-5-98 and the deemed credit is availed on 19-12-98. The original authority in his order has observed that the notification no where stipulates that the credit can be taken at any other time or even within six months; that in fact plain reading of the notification clearly indicates that the credit has to be taken at the time of clearance of such final products and that the noticee should have availed the Modvat credit on 20-5-1998. I fully agree with these findings. The reference to a period of six months for ....