ORDER
K.D. Mankar, Member (T)
1.Heard both sides.
2. Modvat credit has been denied to the appellants on the ground that the claim has been made for credit of duty paid on capital goods, however no corresponding declaration under Rule 57T(1) or 57T(2) has been made nor any request for condonation of making such declaration has been submitted. The appellants disputed this by claiming that the declarations were filed forclaiming credit in respect of some of the capital goods on which credit has been reversed by them under instructions from the department and which is the subject matter of the instant appeal. It is however admitted that in some of the declarations, Rule 57A has been quoted wrongly. However, the description of the capital goods has been correctly mentioned. It is pleaded that it is a curable defect and for this irregularity, the credit should not be denied as held by the Tribunal in several judgments.
3. Learned DR, on the contrary, pleads that filing of a declaration is not an empty formality and on account of non-filing of the declaration, the credit has been correctly denied by the lower authorities.
4. On considering the rival submissions I note that in some
of the declarations, the capital goods have been correctly described though the declaration in question has been filed in terms of Rule 57A, instead of the correct Rule 57Q. This error does not appear to be as grave to deny the substantial modvat credit, especially when no other dispute regarding the duty paid nature and the use of the capital goods in the factory has been raised.
5. It is also noticed that the Government liberalised the scheme of modvat rules by issue of notification 7/99-CE(NT) dated 9.2.1999. It has also been held that the cases which are pending
will be covered by the provisions of the said notifications.
6. In the interest of justice, it would therefore be necessary to
remand the matter back to the Deputy Commissioner of Central
Excise concerned for de novo examination of the issue, especially the provision where non-filing of the declaration is also condoned. The adjudicating authority shall be at liberty to also examine the aspect of availment of depreciation under the Income-tax Act.
7. Accordingly, the orders passed by the lower authorities are set aside and the matter remanded to the Assistant Commissioner/Deputy Commissioner of Central Excise for fresh
determination of the issue regarding admissibility of the modvat
credit, after affording necessary opportunities to the appellants
to present their case, and decide the matter in accordance with law.
8. The appeal is allowed by way of de novo remand.
(Dictated in Court)